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HB 2870

FILM TX CREDIT-SPENDING

104th Regular Session Introduced by Kimberly Du Buclet and 5 co-sponsors

Illinois HB 2870 tightens the film credit by creating Category 1 soundstage thresholds for in-state facilities and requires withholding on loan-out payroll.

Added Co-Sponsor Rep. Bob Morgan
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WeVote Research Nonpartisan
Bill Summary · HB 2870

Summary — HB 2870 (Film Production Services Tax Credit; Illinois, 104th GA, 2025)

Note: The provided material includes text from two different bills both labeled “HB 2870” (an Illinois bill concerning film tax credits and an unrelated Arizona bill about law‑enforcement hiring summaries). This summary covers the Illinois bill titled “FILM TX CREDIT‑SPENDING” introduced in the Illinois General Assembly by Rep. Margaret Croke.

Purpose / intent

The bill amends the Film Production Services Tax Credit Act of 2008 and related provisions of the Illinois Income Tax Act to (1) revise how accredited film/television productions are categorized for credit purposes, (2) modify eligibility and calculation rules for the film production tax credit (including what counts as Illinois labor expenditures), (3) change the definition of “qualified production facility,” and (4) change withholding rules where compensation is paid through “loan‑out” companies for production employees.

Key provisions

  • Adds production categories:
    • Accredited productions are classified as either Category 1 or Category 2 productions.
    • Category 1 requirements (as introduced):
    • At least 75% of all principal filming/taping days that occur at any soundstage (in or out of Illinois) must occur at a “qualified production facility”; and
    • At least 20% of total production expenditures must be for (a) tangible property used at or for the use of a qualified production facility, (b) services performed at a qualified production facility, or (c) a combination of those.
  • Credit amounts and calculation:
    • The bill states it “makes changes concerning the amount of the credit,” but the excerpt does not include specific new credit rates or numeric limits.
  • Illinois labor expenditures and nonresident wages:
    • Modifies rules on how many and which nonresident employees’ wages qualify as Illinois labor expenditures for credit calculation (specific numeric changes are not shown in the excerpt).
  • Definition changes:
    • Revises the statutory definition of “qualified production facility” (text of the new definition is not fully included in the excerpt).
  • Withholding for loan‑out companies (Illinois Income Tax Act, Sec. 701):
    • Introduces an (a‑10) withholding rule: where compensation is paid through a loan‑out company (as defined in the Film Production Services Tax Credit Act) for employees working on an accredited production that concludes on or after a specified date (the introduced text references July 1, 2025), an authorized payroll service company will be treated as the employer for withholding purposes and must withhold Illinois income tax at the applicable resident rate on payments to the loan‑out company.
    • Nonresident employees of loan‑out companies who perform services in Illinois will be treated as taxable nonresidents and subject to Illinois income tax for the year in which they perform services in Illinois.

Who is affected

  • Film, TV, and other accredited productions applying for Illinois film production tax credits — particularly productions that use out‑of‑state soundstages or rely on loan‑out companies.
  • Qualified production facility owners/operators and vendors providing tangible property or services to such facilities.
  • Loan‑out companies and payroll service providers: potential new withholding obligations for payments to loan‑out companies tied to accredited productions.
  • Nonresident production employees working in Illinois whose wages may be treated as Illinois‑sourced and subject to Illinois withholding/tax when paid through a loan‑out company.

Procedural status & sponsors (as provided)

  • Introduced: February 6 or February 14, 2025 (the packet shows both dates; primary sponsor listed as Rep. Margaret Croke).
  • Committee referrals: Referred to Rules Committee; assigned to Revenue & Finance Committee in early March.
  • Co‑sponsors added (per the record): Rep. Bob Morgan (added 2025‑04‑30) and several others, including Chief Co‑Sponsors Rep. Jawaharial Williams and Rep. Yolonda Morris.
  • Effective date: “Effective immediately” (per the bill summary).

Impact/considerations

  • The bill appears intended to sharpen incentives for in‑state filming and facility use by creating a Category 1 designation tied to soundstage usage and local spending, and to prevent credit gaming via loan‑out structures by imposing withholding and tax treatment rules.
  • The excerpt does not provide specific dollar amounts, percentage credit values, caps, or precise numeric limits for the changes to the credit or to the count of nonresident employees — those details would be necessary to quantify fiscal impact.
  • Implementation will affect payroll practices and tax compliance for production payroll vendors and loan‑out companies; productions should review sourcing of expenditures and filming schedules to meet Category 1 thresholds.

If you’d like, I can:
- Extract and summarize the full, enacted text once available;
- Produce a side‑by‑side of current law vs. proposed changes (where full statutory text is provided); or
- Identify likely fiscal impacts and stakeholders to contact for commentary.

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

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