Film tax credit and rehearsal incentive receive first round approval in Senate
February 15, 2023 - The Missouri Senate yesterday gave first-round approval to a bill that would provide two different types of entertainment industry incentives: one for filming movies and related content in Missouri; and another for building rehearsal facilities in Missouri.
The bill, SS SCS SBs 94, 52, 57, 58 & 67, was handled on the Senate floor by Sen. Denny Hoskins (R-21), but was actually a bipartisan combination of five bills sponsored by Sen. Hoskins, Sen. Karla Eslinger (R-33), Sen. Doug Beck (D-1), and Sen. Angela Mosley (D-13).
Show MO Act
Effective January 1, 2023, the film tax credit would equal 20% of qualifying expenses associated with a motion media production project. An additional 5% may be awarded for each of the following conditions if they are met:
At least 50% of the qualified film production project is filmed in Missouri;
At least 15% of the project takes place in a rural or blighted area;
At least three departments of the production hire a Missouri resident ready to advance to the next level in a specialized craft position or learn a new skill set;
The Department of Economic Development determines that the script for such project positively markets a city or region of the state, the entire state, or a tourist attraction located in the state, and the production provides certain advertising materials, as described in the act.
The total dollar amount of tax credits awarded to a qualified film production project may be increased by 10% if such project is located in a county of the second, third, or fourth class.
This credit would expire on December 31, 2029, unless reauthorized by the General Assembly. However, the credit would also expire one year after the Department of Economic Development determines that all other political subdivisions having a tax credit substantially similar to this act let such tax credits lapse or expire.
Entertainment Industry Jobs Act
Effective January 1, 2024, a taxpayer would be eligible for a tax credit for rehearsal expenses and tour expenses for live entertainment tours and associated rehearsals conducted within Missouri. The tax credit would be equal to 30% of such expenses, provided that no taxpayer would receive a tax credit in excess of:
$1 million if such taxpayer's expenses are less than $4 million;
$2 million if such taxpayer's expenses are more than $4 million but less than $8 million; and,
$3 million if such taxpayer's expenses are at least $8 million.
Entertainment industry tax credits would not be refundable, but could be carried forward to the taxpayer's five subsequent tax years. Tax credits that are not redeemed would expire after the fifth tax year following the initial date of issuance, regardless of whether such tax credits are transferred or sold.
Tax credits may be transferred or sold to another Missouri taxpayer. A transferee may not subsequently transfer or sell any tax credit and tax credits may not be transferred or sold for less than 60% of the face value of such tax credits.
The aggregate amount of tax credits that may be authorized under the act in a given fiscal year may not exceed $8 million. If applications for tax credits exceed such amount, the Department of Economic Development may, at its discretion, authorize additional tax credits not to exceed $2 million, provided that the maximum amount of tax credits that may be authorized during the subsequent fiscal year is reduced by such amount.
As a condition of receiving the credit, the artist must perform two concerts in Missouri with attendance of at least 1,000 individuals viewing the performance live.
The entertainment industry tax credit program would expire on December 31, 2030, unless reauthorized by the General Assembly, or 90 days after the Department determines that all other political subdivisions having a tax credit substantially similar to this act let such tax credits lapse or expire.
"The film and entertainment tax incentive bill will create more jobs in Missouri and keep the 20,000 students who recently graduated in our state with a degree in film/media here in Missouri," said Sen. Denny Hoskins. "The new businesses these tax incentives bring will increase revenues to Missouri. This bill will also level the playing field with the other 37 states that have similar film and/or entertainment tax incentives in place, making Missouri a more desired location for films, digital media and concerts."
Associated Industries of Missouri supports both credits as a means of attracting enough business to support permanent industries related to the motion media industry and attracting musical acts and concert revenues to Missouri.