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HF 4668

Film production credit modified.

2025-2026 Regular Session Introduced by Dave Baker and 5 co-sponsors

The bill expands Minnesota film tax credits up to 45% under conditions like Minnesota residency in key roles, majority Minnesota below-the-line hiring, or filming outside the metro

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Bill Summary · HF 4668

Summary of HF 4668 (2025-2026) – Minnesota

Purpose and Intent

HF 4668 proposes modifications to Minnesota’s film production tax credit program (Section 116U.27). The bill aims to adjust eligibility criteria, increase the credit rate in certain circumstances, tighten administration and reporting, and set funding/timelines for credits. The overarching goal appears to be to support Minnesota-based film projects while defining conditions that maximize local employment and production activity within the state.

Key Provisions and Changes

1) Definitions and Eligibility (Sec. 1)

  • Clarifies terms related to the credit, including:
    • Allocation certificate letter: certificate issued for an initial (pre-completion) approval.
    • Credit certificate: certificate after cost verification.
    • Below-the-line crew positions: technical production roles (camera, sound, grips, electricians, etc.).
    • Eligible production costs: costs incurred in Minnesota directly attributable to the film’s production.
    • Promotion of Minnesota: visible display of an approved Minnesota logo in end credits for the life of the project.
  • Defines “Project” to include: a film (or TV programming) that promotes Minnesota, with specific thresholds:
    • For a project (excluding TV commercials): requires at least $1,000,000 spent in eligible production costs within a 12-month period (beginning after expenditures are paid in Minnesota).
    • For a project that is a TV commercial or Minnesota script/screenplay production: requires at least $150,000 in eligible production costs in any consecutive 12-month period, with a goal of employing Minnesota residents where practicable.
  • Requires promotion of Minnesota as part of the project.

2) Credit Amount and Conditions (Sec. 2)

  • Base credit rate: up to 25% of eligible production costs in a 12-month period (under subdivision 1 guidelines).
  • Increased credit: an additional 5% (total up to 40-45% under certain circumstances). Eligibility for the higher credit (up to 45%) requires at least one of the following: 1) Employment of a Minnesota resident in a key creative role. 2) Production filmed outside the seven-county Minneapolis–Saint Paul metro area. 3) Hire of a majority of Minnesota residents in below-the-line crew positions.
  • Note: The bill text shows a modification to allow up to 40% (and up to 45% under the above criteria), expanding the potential incentive.

3) Applications, Allocations, and Timing (Sec. 3)

  • Applications: Taxpayers must apply to the director (in consultation with the Department of Revenue) for a credit.
  • Allocation certificates: If approved, the director issues an allocation certificate letter outlining eligibility, anticipated credit amount (up to 25% or 45%), and the taxable year of allocation.
  • Annual cap: The director may not issue allocation certificates totaling more than $24,950,000 in credits per year.
  • Rollover and carry-forward: If not allocated in the current year, unallocated amounts can be carried forward for four additional taxable years; any remaining unallocated after 2030 will cancel.
  • Allocation prioritization: Credits are allocated on a first-come, first-served basis.
  • Post-project verification: After project completion, an independent Minnesota CPA must verify eligible production costs. The final credit amount cannot exceed the anticipated allocation on the certificate. If the final credit is less, the difference re-enters the pool for allocation.
  • Claiming the credit: Taxpayers must attach the credit certificate to their tax return to claim the credit.

4) Reporting and Oversight (Sec. 4)

  • By January 15, 2025 (and ongoing in following years, as applicable), the Commissioner of Revenue, with the director, must report to Legislature:
    • Number of credits issued, applications submitted, allocation certificates issued, and credits issued.
    • Types of projects eligible for the credit.
    • The economic impact in Minnesota, including job data for Minnesota residents in the relevant industry (NAICS code 512110, 2019–2023 calendar years).
    • Taxpayer details related to credit certificates and total Minnesota taxes paid by eligible businesses (NAICS 512110) for specific periods.
    • Any other information necessary for administration and claiming the credit.

Effective Date

  • Sections 1–4 would become effective on July 1, 2026.

Who Is Affected

  • Film and television producers seeking a Minnesota-based film production credit.
  • Minnesota residents employed in film production (especially in key creative roles or above-the-line vs. below-the-line positions).
  • Production companies with eligible Minnesota costs and activities within the film/TV project.
  • State agencies: Minnesota Department of Revenue, Explore Minnesota (director) and related oversight bodies.

Procedural and Timeline Highlights

  • Annual credit cap set at $24,950,000; rollover for up to four years; credits cease after taxable years beginning after December 31, 2030 if unallocated.
  • First-come, first-served allocation process; pre-approval via allocation certificates before expenditures are completed.
  • Post-completion cost verification required by a Minnesota CPA; final credits must align with verified eligible costs.
  • Ongoing annual reporting to Legislature starting with a 2025 report to inform policy discussion and administration.

If you want, I can provide a comparison with the current law (116U.27) to highlight all material changes side-by-side.

Compiled from official sources — confirm details with the bill’s official record.

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