THE INCENTIVES PROGRAM - TIP

Senate Bill 1911 has passed both Houses and is waiting to be sent to Governor JB Pritzker for his signature. If signed, it would amend the Film Production Services Tax Credit Act for accredited productions commencing on or after July 1, 2025, as follows:

• Increases the amount of the tax credit to equal:
  • 35% of
    • The Illinois production spending for the use of tangible personal property or the expenses to acquire services from vendors in Illinois;
    • The wages paid to residents, subject to the $500,000 per employee limitation;
  • 30% of the wages paid to nonresidents (see limitation below), subject to the $500,000 per employee limitation;
• Allows for the following additional uplifts:
  • 15% of the Illinois labor expenditures generated by the employment of residents of geographic areas of high poverty or high unemployment, as determined by the Department;
  • 5% of the Illinois labor expenditures generated by the employment of Illinois residents for services performed for an accredited production in one or more Illinois counties outside of Cook, DuPage, Kane, Lake, McHenry, and Will Counties;
  • 5% of the Illinois production spending for television series relocating to Illinois from another jurisdiction. All prior seasons of the series must have been filmed outside Illinois;
  • 5% of the Illinois production spending for productions certified as green by the Department;
• Eliminates the current restriction limiting which nonresident job types may qualify as Illinois labor expenditures and replaces it with the following restrictions:
  • No more than 13 nonresidents who are employed in a position other than Actors;
  • For accredited productions with less than $20 million in Illinois production spending – up to 4 nonresident actor wages may qualify;
  • For accredited productions with $20 million to under $40 million in Illinois production spending – up to 5 nonresident actor wages may qualify;
  • For accredited productions with $40 million or more in Illinois production spending – up to 6 nonresident actor wages may qualify;
• Limits qualified wages for executive producers (as defined) to no more than 2 producers per accredited production;
  • If an executive producer is also paid for another role on the production – such as writing or any other service – and that compensation would otherwise qualify as an Illinois labor expenditure, then, subject to the other limitations of this definition, that person’s salary or wages may be considered an Illinois labor expenditure, and that person shall not be considered one of the 2 executive producers;
  • Line producers are not subject to the 2-producer limit;
• Qualifies airfare purchased from an airline domiciled in Illinois;
• Requires the production company or its authorized payroll service company to withhold tax at the tax rate provided in subsection (b) of Section 201 on all payments to loan out companies for services performed in Illinois for a production that is accredited and commences on or after the effective date of this amendatory Act; and,
• Extends the sunset date to December 31, 2038.

This Act takes effect upon becoming law.