ENACTED LEGISLATION (Signed by the Governor)

NORTH CAROLINA
The two bills reported on earlier this month have been signed by the Governor.  The first bill increases the per project cap for a feature film to $20 million dollars from $7.5 million dollars; eliminates the 15% and alternative credit; establishes a 25% refundable film incentive; expands the definition of qualifying expenses to include employee fringe contributions, including health, pension and welfare contributions; and includes per diems, stipends, and living expenses paid for work being performed in North Carolina as qualifying expenses.  Qualifying compensation is still limited to the first one million dollars for each resident and nonresident.  The production company may claim the credit on a tax return filed in the year in which the production is completed.  While an audit by a CPA is not required, the qualifying expenses are subject to audit by the Secretary of Revenue before the credit is allowed.  The second bill eliminates the 6.9% corporate income tax on the amount of the incentive earned by the production company.  As a result, the production company is now able to realize the full 25% of qualifying expenses.