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Bill Summary · HB 915

HB 915 — “Reenact Film Credit” (North Carolina) — Summary

Status & Effective Date
- Bill purpose: reenact the North Carolina production (film) tax credit that had previously been repealed.
- Effective for taxable years beginning on or after January 1, 2025; applies to qualifying expenses incurred on or after that date.

Purpose / Intent
- Restore a state tax incentive to encourage film, television, and other eligible productions to spend and hire in North Carolina by reenacting prior statutory provisions that provided a production-company tax credit.

Key provisions
- Reenactment and recodification
- Reenacts former G.S. 105-151.29 (as it existed immediately before repeal), recodified as G.S. 105‑153.12.
- Reenacts G.S. 105‑130.47 (also as it existed immediately before repeal).

  • Definitions

    • “Production company” as defined in existing statute (G.S. 105‑164.3).
    • “Highly compensated individual”: any person receiving (directly or indirectly) more than $1,000,000 for personal services on a single production. Amounts paid in excess of $1,000,000 to such individuals are excluded from qualifying expenses.
    • “Live sporting event” and related definitions set out to exclude certain productions.

  • Qualifying expenses (examples)

    • Goods and services leased or purchased in NC. For purchases ≥ $25,000, qualifying amount = purchase price minus fair market value at production completion.
    • Compensation and wages subject to North Carolina withholding.
    • Production-related insurance costs (but not insurance bought from a related member).
    • Employee fringe benefits (health, pension, welfare).
    • Per diems, stipends, living allowances for work performed in NC.

  • Credit mechanics

    • Minimum: production company must have at least $250,000 in qualifying NC expenses for a production to qualify.
    • Amount: credit equals 25% of the production company’s qualifying expenses for the production.
    • For episodic TV, an entire season is treated as a single production.
    • Credit is computed on all qualifying expenses tied to the production (not limited to expenses in a single taxable year).
    • Refundable: if the credit exceeds tax liability (after accounting for other credits), the excess is refunded.

  • Limits and exclusions

    • Per‑production cap for feature films: $20,000,000.
    • No credit for political advertising, television news or live sporting event productions, obscene material (per statute), or radio productions.

  • Claim, documentation and enforcement

    • Claim the credit on the return for the year production activities are completed.
    • Return must include production name, description, and detailed accounting of qualifying expenses; Secretary of Revenue may audit.
    • Taxpayer burden to prove eligibility and amount; Secretary may consult NC Film Office and regional film commissions.
    • Department of Revenue must include specified, itemized data in the state economic‑incentives report (locations, qualifying expense categories, employment counts, total General Fund cost).

  • NC Film Office interaction

    • To claim the credit, a production company must notify the Division of Tourism, Film, and Sports Development (NC Film Office) of intent to claim; notification must include title, company, contact, proposed filming dates, and other required info.
    • For productions with credits, production credits must acknowledge the NC Film Office and the regional film office for the area filmed.

Who is affected
- Primary: production companies (studios, production entities) that film or produce in North Carolina.
- Secondary: cast and crew, local vendors and service providers, NC Film Office, Department of Revenue, General Fund (fiscal impact).
- Pass-through entities: the statute treats the pass‑through entity itself as the taxpayer for claiming the credit (it does not flow through to owners).

Potential fiscal and economic impact
- Restores a refundable tax incentive that can increase in‑state production activity, local hiring, and purchases — potentially increasing film-sector economic activity.
- Refundable credits and the $20M per‑feature cap could produce a measurable cost to the General Fund; the bill text requires reporting but does not include a fiscal estimate in the statute.
- Compliance/audit workload for Department of Revenue and administrative interaction with NC Film Office.

Claiming timeline / procedure
- Claim on the tax return for the year production is completed.
- Notification to NC Film Office is required before claiming.
- Records must be retained and made available for inspection; credits subject to audit.

Notes
- The bill reenacts previously repealed provisions rather than creating a wholly new framework; it restores the prior statutory language (including the now‑reinstated sunset language as originally drafted, and other pre‑repeal mechanics).
- Exact implementation details (administrative rules, forms, NC Film Office procedures) would follow under existing Department of Revenue and Commerce processes.

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

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