Bill
SB 3592
Extends and expands Illinois film and live theater tax credits through 2039, increases annual caps, adds non-profit eligibility, and reallocates unused credits to maximize use.
SB 3592 (104th General Assembly) – Illinois Film and Live Theater Tax Credit Reforms
Overview
- Purpose: Update and extend Illinois live theater tax credits, adjust credit categories and funding, and strengthen alignment with Broadway-related activities. The bill extends the sunset for the live theater production credit and reorganizes credit awards among long-run, pre-Broadway, commercial Broadway touring, and non-profit productions. It also tightens definitions and adds a new scheduling requirement for pre-Broadway productions moving toward Broadway.
Effective date
- Effective immediately upon becoming law.
Main provisions and changes
1) Extension of sunset and funding framework
- Sunset extension: Extends the live theater production credit sunset to January 1, 2039 (previously January 1, 2027).
- Fiscal year credit caps (statewide caps):
- Overall caps for certain categories are updated as part of the phased structure:
- Long-run productions and pre-Broadway productions: up to $2,000,000 per State fiscal year.
- Commercial Broadway touring shows: up to $2,000,000 per State fiscal year.
- If, in any State fiscal year, less than $2,000,000 in credits is awarded for long-run and pre-Broadway productions, the shortfall may be added to the $2,000,000 allowed for commercial Broadway touring shows in that same year (i.e., reallocation mechanism).
2) Definitions and eligible production types
- Accredited theater production: Expanded to include pre-Broadway productions, long-run productions with Illinois labor/mkt spend exceeding $100,000, and, for awards after July 10, 2022, commercial Broadway touring shows; starting July 1, 2024, non-profit productions are also eligible.
- Commercial Broadway touring show: A production that plays in at least one other North American market outside Illinois within 12 months of Illinois presentation and has at least $100,000 Illinois production spending.
- Pre-Broadway production: A production that aims for a Broadway Theater District presentation no later than 18 months after Illinois presentation and has at least $100,000 Illinois production spending.
- Long-run production: A production in a qualified facility running more than 8 weeks with at least 6 performances per week (and may span tax years).
- Non-profit theater production: At least 75 minutes, produced by a 501(c)3 in Illinois for at least 5 years, with at least $10,000 Illinois production spending and a minimum annual operating budget of $25,000.
- Qualified production facility: A Illinois venue with substantial capacity (1,200+ seats, or 50+ seats for non-profits) and appropriate support spaces.
3) Credits and allocations
- Tax credit award: Issued by the Department of Commerce and Economic Opportunity (DCEO) and applied against state taxes as defined in the Illinois Tax Act.
- Allocation framework (subject to annual caps):
- For fiscal years ending before June 30, 2022: cap appears to be $2,000,000 per year.
- For fiscal years ending June 30, 2023 and June 30, 2024: cap increased to $4,000,000, with sub-limits:
- No more than $2,000,000 for non-commercial Broadway touring shows (i.e., non-commercial Broadway tours) and no more than $2,000,000 for commercial Broadway touring shows in those two years.
- For fiscal years ending on or after June 30, 2025: total cap increases to $6,000,000 per year, divided as:
- Up to $2,000,000 for long-run productions and pre-Broadway productions.
- Up to $2,000,000 for commercial Broadway touring shows.
- Up to $2,000,000 for non-profit theater productions.
- First-come, first-served: Credits awarded on a rolling, priority basis within annual caps.
- Overflow: If applications exceed the annual cap, excess credits are carried over to the next fiscal year to be awarded when capacity becomes available.
4) Credit administration and transferability
- Credit transfers: Taxpayers earning the credit may sell, assign, or transfer the credit within one year after award, under rules developed by the DCEO.
- Administration: The Department of Revenue, in cooperation with DCEO, will adopt rules to enforce and administer the credit provisions.
5) Credit mechanics and carryforward
- Carryforward: Any credit exceeding the current year’s tax liability may be carried forward for up to five years, applied to earliest available tax liability, with no reduction below zero.
Who is affected
- Eligible taxpayers: Theaters, producers, owners, licensees, operators, or presenters that stage accredited theater productions in Illinois and meet the defined criteria (Illinois labor expenditures, production spending, facility requirements).
- Non-profit and commercial producers: Non-profits become eligible for credits starting July 1, 2024; commercial Broadway touring shows are distinctly treated within the cap structure.
- Illinois workers and vendors: Credits require Illinois labor expenditure (capped per employee at $100,000 per taxpayer per tax year) and Illinois production spending, impacting payroll, payroll taxes, and local vendors.
Timeline and procedural notes
- New credits become available for tax years beginning on or after January 1, 2012 and ending on or before January 1, 2039 (extended sunset).
- Annual cap adjustments and category allocations apply to fiscal years ending June 30 of specific years, with ongoing reallocation mechanics if caps are undersubscribed.
- The act requires rulemaking by DCEO and coordination with the Department of Revenue for administration and enforcement.
Bottom line
SB 3592 preserves and broadens Illinois’s live theater tax credit program, increasing annual caps, broadening eligible production types (including non-profits), clarifying definitions, and adding a reallocation mechanism to optimize use of credits. It modernizes the framework to align more closely with Broadway activity while providing a longer runway for the program through 2039.
Compiled from official sources — confirm details with the bill’s official record.
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