SB45,705,16 71.28 (4) (ad) 4. a. Except as provided in subds. 5. and, 6., and 7. for taxable years beginning after December 31, 2014, a corporation may claim a credit against the tax imposed under s. 71.23, as allocated under par. (d), an amount equal to 5.75 percent of the amount by which the corporation’s qualified research expenses for the taxable year exceed 50 percent of the average qualified research expenses for the 3 taxable years immediately preceding the taxable year for which the claimant claims the credit. If the corporation had no qualified research expenses in any of the 3 taxable years immediately preceding the taxable year for which the claimant claims the credit, the claimant may claim an amount equal to 2.875 percent of the corporation’s qualified research expenses for the taxable year for which the claimant claims the credit.

SB45,1341 Section 1341. 71.28 (4) (ad) 7. of the statutes is created to read:

SB45,706,7 71.28 (4) (ad) 7. a. For taxable years beginning after December 31, 2024, an individual, a partner of a partnership, a shareholder of a tax-option corporation, or a member of a limited liability company may claim a credit against the tax imposed under s. 71.23, as allocated under par. (d), an amount equal to 11.5 percent of the amount by which the individual’s, partnership’s, tax-option corporation’s, or limited liability company’s qualified research expenses for the taxable year exceed 50 percent of the average qualified research expenses for the 3 taxable years immediately preceding the taxable year for which the claimant claims the credit. If the individual, partnership, tax-option corporation, or limited liability company had no qualified research expenses in any of the 3 taxable years immediately preceding the taxable year for which the claimant claims the credit, the claimant may claim an amount equal to 5.75 percent of the individual’s, partnership’s, tax-option corporation’s, or limited liability company’s qualified research expenses for the taxable year for which the claimant claims the credit.

SB45,706,15 b. For purposes of subd. 7. a., “qualified research expenses” means qualified research expenses as defined in section 41 of the Internal Revenue Code, except that “qualified research expenses” includes only expenses incurred by the individual, partnership, tax-option corporation, or limited liability company for research related to nuclear power, incurred for research conducted in this state, for the taxable year and does not include compensation used in computing the credit under sub. (1dx). Section 41 (f) (1), (2), (5), and (6) and (h) of the Internal Revenue Code does not apply to the credit under this subdivision.

SB45,1342 Section 1342. 71.28 (4) (k) (intro.) of the statutes is amended to read:

SB45,706,20 71.28 (4) (k) Refunds. (intro.) Notwithstanding par. (f), for taxable years beginning after December 31, 2017, if the allowable amount of the claim under par. (ad) 4., 5., or 6., or 7. exceeds the tax otherwise due under s. 71.23, all of the following apply:

SB45,1343 Section 1343. 71.28 (4) (k) 1. c. of the statutes is amended to read:

SB45,707,3 71.28 (4) (k) 1. c. For taxable years beginning after December 31, 2023, the amount of the claim not used to offset the tax due, not to exceed 25 percent of the allowable amount of the claim under par. (ad) 4., 5., or 6., or 7., shall be certified by the department of revenue to the department of administration for payment by check, share draft, or other draft drawn from the appropriation account under s. 20.835 (2) (d).

SB45,1344 Section 1344. 71.28 (5f) of the statutes is created to read:

SB45,707,6 71.28 (5f) Film production services credit. (a) Definitions. In this subsection:

SB45,707,13 1. “Accredited production” means a film, video, broadcast advertisement, or television production, as approved by the department of tourism, for which the aggregate salary and wages included in the cost of the production for the period ending 12 months after the month in which the principal filming or taping of the production begins exceeds $100,000 for a production that is 30 minutes or longer or $50,000 for a production that is less than 30 minutes. “Accredited production” does not include any of the following, regardless of the production costs:

SB45,707,15 a. News, current events, or public programming or a program that includes weather or market reports.

SB45,707,16 b. A talk show.

SB45,707,17 c. A production with respect to a questionnaire or contest.

SB45,707,18 d. A sports event or sports activity.

SB45,707,19 e. A gala presentation or awards show.

SB45,707,20 f. A finished production that solicits funds.

SB45,707,23 g. A production for which the production company is required under 18 USC 2257 to maintain records with respect to a performer portrayed in a single media or multimedia program.

SB45,708,2 h. A production produced primarily for industrial, corporate, or institutional purposes.

SB45,708,8 2. “Claimant” means a film production company, as defined in sub. (5h) (a) 2., that operates an accredited production in this state, if the company owns the copyright in the accredited production or has contracted directly with the copyright owner or a person acting on the owner’s behalf and if the company has a viable plan, as determined by the department of tourism, for the commercial distribution of the finished production.

SB45,708,13 3. “Commercial domicile” means the location from which a trade or business is principally managed and directed, based on any factors the department of tourism determines are appropriate, including the location where the greatest number of employees of the trade or business work, the trade or business has its office or base of operations, or from which the employees are directed or controlled.

SB45,709,6 4. “Production expenditures” means any expenditure that is incurred in this state and directly used to produce an accredited production, including expenditures for writing, budgeting, casting, location scouts, set construction and operation, wardrobes, makeup, clothing accessories, photography, sound recording, sound synchronization, sound mixing, lighting, editing, film processing, film transferring, special effects, visual effects, renting or leasing facilities or equipment, renting or leasing motor vehicles, food, lodging, and any other similar pre-production, production, and post-production expenditure as determined by the department of tourism. “Production expenditures” includes expenditures for music that is performed, composed, or recorded by a musician who is a resident of this state or published or distributed by an entity that has its commercial domicile in this state; air travel that is purchased from a travel agency or company that has its commercial domicile in this state; and insurance that is purchased from an insurance agency or company that has its commercial domicile in this state. “Production expenditures” does not include salary or wages or expenditures for the marketing and distribution of an accredited production.

SB45,709,9 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2025, a claimant may claim as a credit against the tax imposed under s. 71.23 any of the following amounts:

SB45,709,13 1. An amount equal to 25 percent of the salary or wages paid by the claimant to the claimant’s employees in the taxable year for services rendered in this state to produce an accredited production and paid to employees who were residents of this state at the time that they were paid.

SB45,709,15 2. An amount equal to 25 percent of the production expenditures paid by the claimant in the taxable year to produce an accredited production.

SB45,709,20 3. An amount equal to the taxes imposed under ss. 77.52 and 77.53 that the claimant paid in the taxable year on the purchase of tangible personal property and taxable services that are used directly in producing an accredited production in this state, including all stages from the final script stage to the distribution of the finished production.

SB45,710,2 (c) Limitations. 1. No amount of the salary or wages paid under par. (b) 1. may be the basis for a credit under this subsection unless the salary or wages are paid for services rendered after December 31, 2025, and directly incurred to produce the accredited production.

SB45,710,8 2. The total amount of the credits that may be claimed by a claimant under par. (b) 1. shall not exceed an amount equal to the first $250,000 of salary or wages paid to each of the claimant’s employees, as described in par. (b) 1., in the taxable year, not including the salary or wages paid to the claimant’s 2 highest-paid employees, as described in par. (b) 1., in the taxable year, if the claimant’s budgeted production expenditures are $1,000,000 or more.

SB45,710,12 3. No credit may be allowed under this subsection unless the claimant files an application with the department of tourism, at the time and in the manner prescribed by the office, and the office approves the application. The claimant shall submit a copy of the approved application with the claimant’s return.