280-RICR-20-20-5
280-RICR-20-20-5. Rules and Regulations for the Certification of Motion Picture Production Tax Credits (version Amendment, 12/01/2013 to 03/18/2018)
State of Rhode Island and Providence Plantations
Rhode Island Division of Taxation in conjunction with
The Rhode Island Film and Television Office
Rules and Regulations for the Certification of
Motion Picture Production Tax Credits
CR 13-14
Table of Contents
Rule 1.
Purpose
Rule 2.
Authority
Rule 3. Application
Rule 4.
Severability
Rule 5. Definitions
Rule 6.
Overview
Rule 7. Applications
Rule 8.
Impact Analysis and Periodic Reporting
Rule 9. Certification of a Production
Rule 10. Priority and Allocation of Credit
Rule 11. Commencement of Production
Rule 12. Cost Report
Rule 13.
Determination of Tax Credit
Rule 14.
Issuance of Tax Credit Certificates
Rule 15. Hearings and Appeals
Rule 16.
Assignment of Tax Credit Certificates
Rule 17.
Sunset
Rule 18.
Effective Date
Rule 1. Purpose
These rules implement Chapter 44-31.2 which was revised by 2012 Public Law Chapter
241 of the Rhode Island General Laws This Chapter, also referred to within as RIGL
Chapter 44-31.2, provides for motion picture production tax credits. These rules govern
the procedures for the application, certification, and issuance of these tax credits.
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Rule 2. Authority
These rules and regulations are promulgated pursuant to RIGL Chapter 44-31.2. These
rules have been prepared in accordance with the requirements of RIGL Chapter 42-35,
the Rhode Island Administrative Procedures Act.
Rule 3. Application
The terms and provisions of these rules and regulations shall be liberally construed to
permit the Rhode Island division of taxation, within the department of revenue, and the
Rhode Island film and television office, within the department of administration, to
effectuate the purposes of RIGL Chapter 44-31.2 and other applicable state laws and
regulations.
Rule 4. Severability
If any provision of these Rules and Regulations, or the application thereof to any person
or circumstances, is held invalid by a court of competent jurisdiction, the validity of the
remainder of the Rules and Regulations shall not be affected thereby.
Rule 5. Definitions
“above-the-line person” means a motion picture director, writer, producer or featured
actor. Motion picture directors, writers, producers, featured actors and their fees are
grouped within the “pre-production,” “production” and/or “post-production section of a
typical motion picture budget, above a solid, bold line, separating these few “above-the-
line” persons from the majority of the “below-the-line” crew, other production and post-
production expenses.
“accountant’s certification” means a certified audit by a Rhode Island certified public
accountant licensed in accordance with § 5-3.1-5 of the Rhode Island General Laws, as
amended.
“act” means chapter 44-31.2 of the Rhode Island General Laws, as amended.
“alternative distribution method” for the purposes of the production tax credit means an
executed agreement among all participants of a pass-through entity, or among all owners
of a motion picture having multiple owners, setting forth the method for allocation of the
motion picture production tax credit agreed upon by and among the participants or co-
owners. An alternative distribution method may include, without limitation, a partnership
agreement, an operating agreement of a limited liability company, a shareholders
agreement, or any other instrument executed by all participants or co-owners.
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“amended production” means one additional separate and distinct application that is
allowable for the same production for purposes such as “re-shoots”, “retakes”, added
scenes or any additional production expenditures incurred and paid within the State of
Rhode Island (but not previously included in the cost report) provided that the motion
picture has already met the conditions required for, and has already been approved for
final certification by the film office and the division of taxation. The amended
application must individually meet the statutory requirements for a state certified
production including, but not limited to, a total production budget of a minimum of one
hundred thousand dollars ($100,000). The additional production expenditures shall be
included in a separate cost report, require a separate accountant’s certification, and be
subject to a separate review by the division of taxation.
“applicant” means a motion picture production company domiciled in Rhode Island,
which is a corporation, partnership, limited partnership, or other entity or individual,
submitting an application to the film office and the division of taxation for initial or final
certification of a production.
“application year” means within the calendar year the motion picture production
company files any application for the tax credit.
“certificate of motion picture production tax credit” means a certificate issued by the
division of taxation, which states the amount of the motion picture production tax credit
for which the production has qualified. A motion picture production company is
prohibited from using State funds, State loans or State guaranteed loans to qualify for the
motion picture tax credit. The certificate shall include, but not be limited to, the
following information: specific and unique certificate number, name and address of the
approved applicant, name of the state certified production, name of the qualified film to
which the credit applies, date on which production completed, date of final certification
by the division of taxation, the name and taxpayer identification number of production
company that incurred and paid state certified Rhode Island production expenditures,
total amount of state certified Rhode Island production expenditures, name of initial
holder of this certificate, taxpayer identification number of initial holder of this
certificate, and amount of credit allocated to initial holder of this Certificate.
“completion of a production” means the date of completion of a motion picture’s
production in the State of Rhode Island as certified to the film office and the division of
taxation as part of the production’s cost report.
“costs” (a) include, but are not limited to, the following expenses which shall qualify
when incurred within the State of Rhode Island and paid to a qualified vendor:
(1) set construction, set dressing and operation – labor and materials provided by a
qualified vendor where the labor and materials are actually and physically provided,
supplied, consumed or used within Rhode Island;
(2) wardrobes, make-up, accessories, props, expendables, supplies and related services;
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(3) costs associated with photography and sound synchronization, lighting, and related
services and materials including animation costs - labor and materials provided by a
qualified vendor where the labor and materials are actually and physically provided,
supplied, consumed or used within Rhode Island;
(4) editing and related services including, but not limited to, film processing, transfers
of film to tape or digital format, sound mixing, computer graphics services, special
effects, and animation services – provided the work is performed or procured in the state
of Rhode Island;
(5) salary, wages, and other compensation, including related benefits paid by the
employer for health insurance, pension/retirement benefits, and life insurance of persons
employed, either directly or indirectly, in the production of a film including, but not
limited to, writer, actor, motion picture director, and producer (provided the work is
performed in the State of Rhode Island);
(6) rental of facilities, site locations and equipment located and procured in the State of
Rhode Island;
(7) leasing of vehicles from a qualified vendor where the vehicles are actually and
physically delivered, provided, supplied, consumed or used within Rhode Island;
(8) costs of food and lodging - procured or performed by a qualified vendor where the
food and lodging are actually and physically provided, delivered, supplied, consumed or
used within Rhode Island;
(9) music, if performed, composed, or recorded by a Rhode Island musician, or released
or published by a person domiciled in Rhode Island;
(10) travel expenses incurred to bring persons employed, either directly or indirectly, in
the production of the film to Rhode Island (but not expenses of such persons departing
from Rhode Island); and
(11) legal (but not expense of completion bond or insurance) and accounting fees and
expenses related to the production’s activities in Rhode Island provided such services are
provided by Rhode Island licensed attorneys or accountants.
(b) costs that do not qualify as state certified production costs, include without
limitation, the following:
(1) any salaries, wages, and other compensation, including related benefits to
individuals who are performing services outside the State of Rhode Island;
(2) any travel expenses for persons departing from the State of Rhode Island;
(3) any expense attributable to a completion bond;
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(4) insurance expenses, including workers’ compensation insurance and temporary
disability insurance;
(5) any cost associated with the promotion or marketing of the production including
premier showings, special screenings and advertising;
(6) costs that were not incurred in Rhode Island;
(7) costs that have not been paid at the time of the application for final certification;
(8) costs which have not been the subject of the Rhode Island accountant’s certification;
(9) bank fees or charges;
(10) federal and state withholding tax amounts;
(11) payments to the Rhode Island Secretary of State’s office;
(12) payments to the Rhode Island division of taxation, including, but not limited to,
payments for tax filings, letter of good standing requests, and audits conducted under
Chapter 44-31.2;
(13) payments to the Rhode Island film office;
(14) expenses incurred for the preparation of the cost report;
(15) payments made to a nonqualified vendor; and
(16) costs incurred prior to filing a completed initial certification application with the
film office.
(c) In the case where props and other production assets, with a cost of more than two
thousand five hundred dollars ($2,500), are purchased, created or acquired for a Rhode
Island production and kept in inventory for future use, there must be deducted from the
cost incurred in Rhode Island the fair market value of the assets remaining after initial
use in Rhode Island. The fair market value shall be attested to by an independent
appraiser in a manner prescribed by the director of the Rhode Island film office in
conjunction with the Rhode Island division of taxation.
Example: A prop is purchased from a qualified vendor for use in a production in the
State of Rhode Island at a cost of $5,000 and placed in storage at the end of production.
The fair market value of the prop at the end of production is certified to be $4,000 by an
independent appraiser. For purposes of the cost report, only the $1,000 value consumed
during production will be allowed.
“costs incurred within the state” means, in the case of tangible property, which is
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acquired from or through a qualified vendor will constitute a cost incurred within the
State of Rhode Island where goods and materials are actually and physically provided,
supplied, consumed or used within Rhode Island and, in the case of services, shall mean
services performed within the State of Rhode Island.
Example 1: Wardrobe purchased or rented from a qualified vendor where the labor and
materials are actually and physically provided, supplied, consumed or used within Rhode
Island will constitute a cost incurred within the state. However, wardrobe purchased or
rented from a non-qualified vendor and shipped to Rhode Island will not constitute a cost
incurred within the state.
Example 2: Catering expenses and services provided by a qualified vendor where the
labor and materials are actually and physically provided, supplied, consumed or used
within Rhode Island will constitute a cost incurred within the state. However, catering
services rendered outside of Rhode Island or by a non-qualified vendor will not constitute
a cost incurred within the state.
Example 3: Props purchased or rented from a qualified vendor where the labor and
materials are actually and physically provided, supplied, consumed or used within Rhode
Island will constitute a cost incurred within the state. However, props acquired from a
non-qualified vendor or created outside of Rhode Island will not constitute a cost
incurred within the state.
Example 4: Set construction materials, such as lumber and steel, purchased or rented
from a qualified vendor where the labor and materials are actually and physically
provided, supplied, consumed or used within Rhode Island will constitute a cost incurred
within the state. However, materials acquired from a non-qualified vendor or constructed
outside of Rhode Island will not constitute a cost incurred within the state.
Example 5: Shipping expenses incurred to send materials and supplies to Rhode Island
will constitute a cost incurred within the state. However, shipping expenses for materials
and supplies shipped from Rhode Island to an out of state location will not constitute a
cost incurred within the state.
“division of taxation” means that office within the department of revenue that operates
under the authority and direction of the tax administrator, pursuant to RIGL §44-1-1 et
seq.
“documentary production” means a non-fiction production intended for educational or
commercial distribution that may require out of state principal photography.
“domiciled in Rhode Island” means a corporation incorporated in Rhode Island or a
partnership, limited liability company, or other business entity formed under the laws of
the State of Rhode Island for the purpose of producing motion pictures, or an individual
who is a domiciled resident of Rhode Island as defined in the Rhode Island General Laws
Section 44-30-5. Such individual, corporation, partnership, limited liability company, or
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other entity, is subject to the General Laws of the State of Rhode Island including, but not
limited to, Chapters 44-11, 44-12 and 44-30.
“feature-length film” means a production intended for commercial distribution to a
motion picture theater or directly to the home video market that has a running time of at
least seventy-five (75) minutes in length.
“film office” means an office within the department of administration that has been
established in order to promote and encourage the locating of film and television
productions within the State of Rhode Island. The office is also referred to within as the
“Rhode Island film and television office.”
“film office director” means the Director of the Rhode Island Film and Television Office.
“final production budget” means and includes the total pre-production, production and
post-production out of pocket costs incurred and paid in connection with the making of
the motion picture. The final production budget excludes costs associated with the
promotion or marketing of the motion picture.
“inspection” means a visit by an authorized representative of the film office and/or the
division of taxation to a property, including a set, a soundstage, a location or a production
office for services performed in Rhode Island.
“loan-out company” means and includes a corporation, partnership, limited liability
company, S-corporation, association, nominee trust, or any other entity through which an
artist or other person is loaned out to perform services for the motion picture production
company. Regardless of structure, employees or other persons of such loan-out
companies and the loan out company itself shall be subject to all applicable provisions of
the Rhode Island personal income tax and any applicable payroll or other tax provisions.
A loan-out company shall be registered with the Rhode Island Secretary of State and the
Rhode Island division of taxation.
“motion picture” means feature-length film, documentary production, video, video game,
television series, or commercial made in Rhode Island, in whole or in part, for theatrical
or television viewing or as a television pilot or for educational distribution. Motion
picture shall not include the production of television coverage of news or athletic events,
nor shall it apply to any film, video, television series or commercial or production for
which records are required under Section 2257 of Title 18, U.S.C., to be maintained with
respect to any performer in such production or reporting of books, films, etc. with respect
to sexually explicit conduct.
“motion picture production company” (1) means a corporation, partnership, limited
liability company, or other business entity, domiciled in Rhode Island, and engaged in the
business of producing one or more motion pictures. Generally, the motion picture
production company controls the state certified motion picture during production and is
responsible for payment of the direct production expenses (including pre- and post-
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production), and is a signatory to the state certified motion picture’s contracts with its
payroll company and facility operators.
(2) motion picture production company shall not mean or include:
(a) any company owned, affiliated, or controlled, in whole or in part by any company or
person which is in default:
(i) on taxes owed to the state; or
(ii) on a loan made by the state in the application year; or
(iii) on a loan guaranteed by the state in the application year; or
(b) any company or person who has discharged an obligation to pay or repay public
funds or monies by:
(i) filing a petition under any federal bankruptcy, or state receivership, or insolvency
law against such company or person;
(ii) having a petition filed under any federal bankruptcy, or state receivership, or
insolvency law against such company or person;
(iii)consenting to, acquiescing in, or joining in a petition named in (i) or (ii) above;
(iv) consenting to, acquiescing in, joining in the appointment of a custodian, receiver,
trustee, or examiner for such company’s or person’s property; or
(v) making an assignment for the benefit of creditors, or admitting in writing or in any
legal proceeding its insolvency or inability to pay debts as they become due.
“participant” means a partner in a partnership, member of a limited liability company,
shareholder of an S-corporation, a beneficial owner of a trust, or any other person having
an interest in a pass-through entity.
“pass-through entity” means a partnership, limited liability company, S-corporation,
association, nominee trust, or any other entity, the tax attributes of which are passed
through to the participants in such entity.
“post-production” means the final stage in a state certified motion picture’s production
after principal and ongoing photography is completed, including, but not limited to,
editing, Foley recording, automatic dialogue replacement, sound editing, special effects,
scoring and music editing, beginning and end credits, negative cutting, soundtrack
production, the addition of sound/visual effects, dubbing, and subtitling. Advertising and
marketing activities and expenses are not included in post-production.
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“pre-production” means costs directly related to the production, which are incurred prior
to the first day of principal photography for a state certified motion picture. For example,
the establishment of a dedicated production office, the hiring of key crew members such
as a unit production manager, line producer and location manager, and includes, but is
not limited to, activities such as location scouting, hiring of crew, and execution of
contracts with vendors of equipment and stage space.
“primary locations” means the locations within which (1) at least fifty-one percent (51%)
of the motion picture’s total principal photography days are filmed; or
(2) at least fifty-one percent (51%) of the motion picture’s final production budget is
spent and at least five (5) individuals were employed by the production company during
the production in this State; or
(3) for documentary productions, the location of at least fifty-one percent (51%) of the
total productions days, which shall include pre-production and post-production locations.
“principal photography and/or animation” means the filming and/or animation of major
and significant portions of a state certified production that involves the lead actors and/or
animators.
“qualified vendor” means any individual, partnership, corporation, limited liability
company or other business entity that (1) provides goods and services in this state to a
state certified motion picture during production;
(2) maintains a place of business in Rhode Island;
(3) is subject to Rhode Island taxation;
(4) is registered with the Rhode Island division of taxation; and
(5) is registered with the Rhode Island Secretary of State’s office and is qualified to do
business in Rhode Island.
“Rhode Island film and television office” means an office within the department of
administration that has been established in order to promote and encourage the locating
of film and television productions within the State of Rhode Island. The office is also
referred to within as the “film office.”
“state certified production” means a motion picture production approved by the Rhode
Island film and television office and produced by a motion picture production company
domiciled in Rhode Island, whether or not such company owns or controls the copyright
and distribution rights in the motion picture; provided that such company has either:
(1) signed a viable distribution plan; or
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(2) is producing the motion picture; or
(a) a major motion picture distributor; or
(b) a major theatrical exhibitor; or
(c) a television network; or
(d) a cable television programmer; or
(e) web-based streaming distribution.
(3) Additionally, the production must be produced with the motion picture’s “primary
locations” being filmed within the State of Rhode Island and with a “total production
budget” of a minimum of one hundred thousand dollars ($100,000).
“state certified production costs” means any pre-production, production, and post-
production cost directly attributable to activity within this state that a motion picture
company incurs and pays to the extent that it occurs within the State of Rhode Island.
The term refers to a production certified by the State of Rhode Island under the Act and
should not be taken to infer that the State of Rhode Island is certifying the production
costs. State certified production costs do not include costs paid for using State funds,
State loans or State guaranteed loans to qualify for the motion picture tax credit.
“television pilot” means the initial episode produced for a proposed episodic television
series. This category will include shorter formats which are known as “television
presentation”, a production of at least fifteen (15) minutes in length, produced for the
purposes of selling a proposed television series, but not intended for broadcast.
“television series” which may also be known as “episodic television series” means a
regularly occurring production, live action, animation or a combination of the two,
intended in its initial run for broadcast on television, whether free or via subscription-
based service, that has a running time of at least thirty (30) minutes in length (inclusive of
commercial advertisement and interstitial programming).
“total production budget” means and includes the motion picture production company’s
pre-production, production and post-production costs incurred for the production
activities of the production company in Rhode Island in connection with the making of
the state certified production. The budget shall not include costs associated with the
promotion or marketing of the film, video, or television product; costs not incurred within
Rhode Island; costs not paid; or costs provided by nonqualified vendors.
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Rule 6. Overview
A. The process of applying for and receiving motion picture production tax credit
certificates consist of the following steps:
(1) The production company files an application for initial certification with the film
office. (For details see Rule 7.)
(2) The film office prepares an impact analysis based on information provided by the
production company on its initial application. The analysis is available for public
inspection and is posted on the division of taxation’s website. (For details see Rule 8.)
(3) The film office, following review and approval of the initial certification request,
issues an initial certification letter to the motion picture production company and to the
tax administrator. If the film office rejects an initial certification request, a written
notification will be sent to the applicant. (For details see Rule 9.)
(4) The production company notifies the film office in writing of the commencement of
production. (For details see Rule 11.)
(5) The production company, after completion of a production, files an application for
final certification of the production with the film office and the division of taxation. (For
details see Rule 7 and Rule 9.)
(6) The division of taxation makes a determination of the amount of tax credit based on
its review of state certified production costs. (For details see Rule 13.)
(7) The division of taxation, upon determination that the production company has
complied with all necessary requirements, issues tax credit certificates to the production
company. (For details see Rule 14.)
B. In addition, all recipients of motion picture production tax credits are required to file
annual reports with the tax administrator, for the year they receive a tax credit, as
follows:
(1) Rhode Island Form TC-100 must be filed by August 15 . (For details see Rule 8.)
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(2) Rhode Island Form 8201A must be filed by September 1 . (For details see Rule 8.)
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Rule 7. Applications
A. Applications for designation of a motion picture production as a state certified
production shall be made on State Certification Application forms. These forms are
available from the film office at One Capitol Hill, Third Floor, Providence, Rhode Island
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02908 or from the film office’s website at www.film.ri.gov and the division of taxation’s
website at www.tax.ri.gov. The Initial Application is used to request initial certification of
a motion picture production and shall be filed with the film office before the
commencement of Rhode Island production activities. The Final Application is used after
the completion of Rhode Island production activities to request final certification of the
production and the issuance by the division of taxation of any credit documents relating to
the completion of a state certified production.
B. Application for initial certification of a production. (1) The applicant shall properly
prepare, sign and submit the Initial Certification Application form to the film office. This
part of the application, when completed, contains information regarding both the motion
picture production company and a specific Rhode Island motion picture such that the film
office may make a determination pertaining to the initial certification of the production.
(2) Any costs incurred prior to filing a complete initial certification application shall not
be allowed for purposes of meeting the one hundred thousand dollars ($100,000) minimum
Rhode Island production budget or as a cost in calculating the motion picture production
tax credits.
(3)The information submitted shall include the following and any other data the film
office determines necessary for the proper evaluation and administration of the
application:
(a) identification information: name and address of applicant, name of contact person,
telephone numbers and email addresses; federal employer identification number[s]; the
production company’s Rhode Island address (including federal employer identification
number, contact person, telephone numbers and email addresses); brief background and
structure of the company, and information (including name, address and federal employer
identification number) about other companies which are related, affiliated, or controlled by
the motion picture production company and which are expected to be involved in the
production.
(b) timing information: anticipated start date; anticipated completion date; proposed
schedule; and estimated number of principal photography days to be filmed in Rhode
Island and outside of Rhode Island.
(c) financial information: proposed total production budget, estimated motion picture
budget (expenditures within the State of Rhode Island), and information for each of the
“above the line” individuals as to whether they will be employees of the motion picture
production company or, if not, the name, address, and federal employer identification
number of the entity by which they will be employed. Additionally, the applicant will
estimate the anticipated amount of Rhode Island motion picture production tax credit from
this production.
(d) operational information: brief description of the motion picture production,
including:
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(i) story synopsis and screenplay for proposed motion picture production; and;
(ii) a statement as to whether the company owns or controls the copyright and distribution
rights in the motion picture; and,
(iii) a copy of the signed viable distribution plan or evidence that the production company
is producing the motion picture for a major motion picture distributor, a major theatrical
exhibitor, a television network or a cable television programmer.
(e) payroll company information: name, address, and federal employer identification
number of any company or other entity who will make withholding tax payments and
employer tax payments on behalf of the production company. The payroll company must
be a qualified vendor.
(f) other information: the anticipated days each “above the line” person (i.e., producers,
motion picture director, writers and featured actors) is scheduled to perform work in Rhode
Island; copies of documents evidencing that the motion picture production company is
formed under the laws of the State of Rhode Island; and one paragraph each regarding
production plans for internship, diversity and training programs in Rhode Island.
C. Application for Final Certification of a Production. (1) When production is
completed, the applicant shall submit a completed application for final certification to the
film office and the division of taxation. Such application must contain the signature of the
applicant, including title and date. This application contains information regarding both the
motion picture production company and the specific Rhode Island motion picture (which
has previously been granted initial certification from the film office and provides
documentation that the completed state certified motion picture production is consistent
with the work described in the initial certification. Such final application shall be filed
within three (3) years after the date Rhode Island production activities have finished. The
final application must also contain a cost report as prescribed by the tax administrator and
an “accountant’s certification” to evidence the motion picture production company’s
compliance with all provisions of RIGL chapter 44-31.2. The film office and the division
of taxation may rely, without independent investigation, upon the accountant’s certification
confirming the accuracy of the information included in the cost report.
(2) The application for final certification information shall, in addition to the items
above, include all the following information, and any other information that the division of
taxation determines necessary for proper evaluation and administration of the application.
The following information is to be submitted to both the film office and the division of
taxation:
(a) identification data: name and address of applicant (including contact person,
telephone numbers and email addresses); federal employer identification number[s]; the
production company’s Rhode Island address, (including federal employer identification
number, contact person, telephone numbers and email addresses); and, for compliance
purposes, the name, address and federal employer identification number or social security
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number of each company related, affiliated or controlled by the motion picture production
company as of the production’s completion date, a description and amount of the
relationship, affiliation or control, and a copy of the initial certification letter showing the
unique identifying number assigned by the film office.
(b) timing information: actual start date; actual completion date; the daily schedule of the
entire production and of all employees and personnel, above the line and below the line;
and actual number of principal photography days filmed in Rhode Island and outside of
Rhode Island.
(c) financial information: actual data for the total production budget, including final
combined expenditures within the State of Rhode Island and outside the State of Rhode
Island.
(d) operational information: final script for the motion picture production; all travel
schedules and data for “above-the-line” persons arriving and departing the State of Rhode
Island including the actual number of days each performed work in Rhode Island; location
of soundstage and one paragraph each regarding how the production applied internship,
diversity and training programs.
(e) maximum credit calculation: based on the production costs incurred and paid and
other information in the application for final certification, the applicant will calculate an
estimate of the total amount of production credits associated with the production and show
a comparison between the estimated total credits and the total production budget.
(3) In addition to the above, the following information must also be provided to the
division of taxation in order to verify the credit amount (all lists shall include the name,
address, federal employer identification number or social security number, amount paid and
dates paid, and be in a manner prescribed by the tax administrator):
(a) a list of the loan out companies, temporary agencies, employee leasing companies,
and professional employee organizations that have provided services to the motion picture
production company within the State of Rhode Island;
(b) a list of qualified vendors that have sold and/or rented goods to the motion picture
production company for use within the State of Rhode Island,
(c) a list of all personnel involved in the production;
(d) a complete general ledger as certified by a Rhode Island certified public accountant;
(e) payroll records for all cast and crew working on the production;
(f) copies of all invoices and receipts broken down by expense categories as prescribed
by the tax administrator
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(g) the production “bible;” and
(h) any other information the tax administrator considers necessary.
D. Disclosure of Application Information.
(1) Records maintained by the division of taxation may not be publicly disclosed as
provided in RIGL §38-2-2.
(2) (a) In the event a request for access to public records is made, application
information submitted to the film office may be publicly disclosed under the Access to
Public Records Act, Chapter 38-2 of the Rhode Island General Laws, as amended, unless
it comes within one of the exemptions set forth in RIGL §38-2-2.
(b) Records that are exempt from disclosure are described in RIGL §38- 2-2(4). For
example, RIGL §38-2-2(4)(B) provides an exemption that “Trade secrets and
commercial or financial information obtained from a person, firm, or corporation which
is of a privileged or confidential nature” are not deemed public.
(c) If an Applicant believes that certain information submitted as part of its applications
is exempt from public disclosure, on the submitted record such information should be
marked or labeled “Exempt from Public Disclosure”. This label should also set forth the
applicable statutory exemption. For the example above, please reference RIGL §38-2-
2(4)(B).
(d) In the event that a person requests that all or part of a submitted record be publicly
disclosed, the person must submit such a request to the film office. As stated in the
Access to Public Records Act, the film office must respond in writing within 10 business
days of receipt. If any submitted record has been described as exempt from disclosure,
the film office will consider whether or not the exempted record falls within a particular
exemption.
Rule 8. Impact Analysis and Periodic Reporting
A. As provided in RIGL §44-31.2-6.1, the film office shall not certify or approve any
application under RIGL § 44-31.2-6 until it has first prepared and publicly released an
analysis of the impact the proposed investment will or may have on the state. The
analysis shall be supported by appropriate data and documentation and shall consider, but
not be limited to, the following factors:
(1) The impact on the industry or industries in which the applicant will be involved;
(2) State fiscal matters, including the state budget (revenues and expenses);
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(3) The financial exposure of the taxpayers of the state under the plans for the proposed
investment and negative foreseeable contingencies that may arise therefrom;
(4) The approximate number of full-time, part-time, temporary, seasonal and/or
permanent jobs projected to be created, construction and non-construction;
(5) Identification of geographic sources of the staffing for identified jobs;
(6) The projected duration of the identified construction jobs;
(7) The approximate wage rates for each category of the identified jobs;
(8) The types of fringe benefits to be provided with the identified jobs, including
healthcare insurance and any retirement benefits;
(9) The projected fiscal impact on increased personal income taxes to the state of
Rhode Island; and
(10) The description of any plan or process intended to stimulate hiring from the host
community, training of employees or potential employees, and outreach to minority job
applicants and minority businesses.
B. The film office shall monitor every impact analysis it completes through the duration
of any approved tax credit. Such monitoring shall include annual reports made available
to the public on the:
(1) Actual versus projected impact for all considered factors; and
(2) Verification of all commitments made in consideration of state incentives or aid.
C. Upon its preparation and release of the analysis required by subsection (B) of this
rule, the film office shall provide copies of that analysis to the chairpersons of the house
and senate finance committees, the house and senate fiscal advisors, the department of
labor and training and the division of taxation. Any such analysis shall be available to the
public for inspection by any person and shall by published by the tax administrator on the
tax division website. Annually thereafter, through and including the second tax year after
any taxpayer has applied for and received a tax credit pursuant to this chapter, the
department of labor and training shall certify to the chairpersons of the house and senate
finance committees, the house and senate fiscal advisors, the corporation and the division
of taxation that:
(1) the actual number of new full-time jobs with benefits created by the state-certified
production, not including construction jobs, is on target to meet or exceed the estimated
number of new jobs identified in the analysis above, and
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(2) the actual number of existing full-time jobs with benefits has not declined. For
purposes of this section, "full-time jobs with benefits" means jobs that require working a
minimum of thirty (30) hours per week within the state, with a median wage that exceeds
by five percent (5%) the median annual wage for full-time jobs in Rhode Island and
within the taxpayer's industry, with a benefit package that includes healthcare insurance
plus other benefits typical of companies within the motion picture industry. The
department of labor and training shall also certify annually to the house and senate fiscal
committee chairs, the house and senate fiscal advisors, and the division of taxation that
jobs created by the state-certified production are "new jobs" in the state of Rhode Island,
meaning that the employees of the motion picture production company are in addition to,
and without a reduction of, those employees of the motion picture production company
currently employed in Rhode Island, are not relocated from another facility of the motion
picture production company in Rhode Island or are employees assumed by the motion
picture production company as the result of a merger or acquisition of a company already
located in Rhode Island. The certifications made by the department of labor and training
shall be available to the public for inspection by any person and shall be published by the
tax administrator on the tax division website.
D. The film office, with the assistance of the motion picture production company, the
department of labor and training, the department of human services and the division of
taxation shall provide annually an analysis of whether any of the employees of the motion
picture production company has received RIte Care or RIte Share benefits and the impact
such benefits or assistance may have on the state budget. This analysis shall be available
to the public for inspection by any person and shall be published by the tax administrator
on the tax division website. Notwithstanding any other provision of law or rule or
regulation, the division of taxation, the department of labor and training and the
department of human services are authorized to present, review and discuss project-
specific tax or employment information or data with the film office, the chairpersons of
the house and senate finance committees, and/or the house and senate fiscal advisors for
the purpose of verification and compliance with this tax credit reporting requirement.
E. Any agreements or contracts entered into by the film office and the motion picture
production company shall be sent to the division of taxation and be available to the public
for inspection by any person and shall be published by the tax administrator on the tax
division website.
F. By August 15th of each year the motion picture production company shall file Rhode
Island Form TC-100 reporting the source and amount of any bonds, grants, loans, loan
guarantees, matching funds or tax credits received from any state governmental entity,
state agency or public agency as defined in § 37-2-7 during the previous state fiscal year.
The completed Form TC-100 shall be sent to the division of taxation and be available to
the public for inspection by any person and shall be published by the tax administrator on
the tax division website.
G. By August 15th of each year the division of taxation shall report the name, address,
and amount of tax credit received for each motion picture production company during the
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previous state fiscal year to the film office, the chairpersons of the house and senate
finance committees, the house and senate fiscal advisors, and the department of labor and
training. This report shall be available to the public for inspection by any person and shall
be published by the tax administrator on the tax division website.
H. Beginning September 1, 2011, and every September 1 thereafter, the motion picture
production company shall file Rhode Island Form 8201A with the tax administrator. Said
report shall contain each full-time equivalent, part-time or seasonal employee's name,
social security number, date of hire, and hourly wage as of the immediately preceding
July 1 and such other information deemed necessary by the tax administrator. The report
shall be filed on a form and in a manner prescribed by the tax administrator.
Rule 9. Certification of a Production
A. Initial Certification of a Production: (1) Where necessary documentation is not
provided, review and evaluation will be delayed and initial certification may be denied on
the basis of lack of information. Because the circumstances of each production are unique,
initial certifications that have been granted to one production shall not be used nor relied
upon by applicants for other productions.
(2) Any costs incurred prior to filing a complete initial certification application shall not
be allowed for purposes of meeting the one hundred thousand dollars ($100,000) minimum
Rhode Island production budget or as a cost in calculating the motion picture production
company tax credits.
(3) The film office will complete its review for initial certification requests within thirty
(30) business days of receiving a complete, adequately documented application. Where
adequate information is not provided, the film office will notify the applicant of the
additional information needed to complete the review. The film office will adhere to this
time period as closely as possible, but failure to complete a review within the designated
period does not waive or alter any certification requirement nor does it imply approval.
(4) Initial Certification Letter: (a) Once the review is completed, the film office will issue
initial certification of the motion picture production in the form of a letter issued to the
motion picture production company and to the tax administrator. The letter states that, after
appropriate review, the initial application meets the appropriate criteria for conditional
eligibility. The letter of initial certification is only a statement of conditional eligibility for
the production and, as such, does not grant or convey any Rhode Island tax benefits. If the
film office denies initial certification, the applicant may appeal that decision under the
provisions of RIGL §44-31.2-8.
(b) The letter of initial certification includes, but is not limited to, the following
information: name and address of the applicant, the name of the motion picture production,
the effective date for the production, taxpayer identification number of the motion picture
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production company, and a unique identifying number assigned by the film office and
required for each production. The letter also gives notice that, upon completion of the
production, the application for final certification must be completed including the receipt of
a Rhode Island Certificate of Good Standing for the production company to verify the
production company’s compliance with all provisions of RIGL §44-31.2.
B. Final Certification of a Production: (1) Where necessary documentation is not
provided, review and evaluation will be delayed and final certification may be denied on
the basis of lack of information. Because the circumstances of each production are unique,
final certifications that have been granted to one production shall not be used nor relied
upon by applicants for other productions.
(2) Within ninety (90) business days after the division of taxation’s receipt of the motion
picture production company’s application for final certification and fully documented cost
report, the division of taxation shall issue a certification of the amount of credit for which
the motion picture production company qualifies under section 44-31.2-5. When adequate
information is not provided, the division of taxation will notify the applicant of the
additional information needed to complete the review. The division of taxation will adhere
to this time period as closely as possible, but failure to complete a review within the
designated period does not waive or alter any certification requirement nor does it imply
approval.
(3) The division of taxation will determine the final certification of the production and
issue a written determination to the applicant either denying or granting certification.
Depending upon the determination, the division of taxation will calculate the amount of
Rhode Island Motion Picture Production Tax Credit and issue the applicable Certificate[s].
To claim the tax credit, the tax credit certificate issued by division of taxation shall be
attached to the state tax return on which the credit is initially claimed. If the division of
taxation denies final certification, the applicant may appeal the division of taxation’s
decision under the provisions of RIGL §44-31.2-8 (For details see Rule 15).
C. Decisions, Reliance on Application: (1) Initial certifications are only issued in writing
by the film office director or other duly authorized representative of the film office. Final
certifications are only issued in writing by the tax administrator or other duly authorized
representative of the division of taxation. Decisions with respect to initial and final
certifications are made on the basis of the information contained in the application form
and other available information. The applicant’s signature on any application form is a
representation to the film office and the division of taxation that the facts contained therein
are true and correct, and the film office and the division of taxation is entitled to rely
thereon. If, at any time, it comes to the attention of the film office or the division of
taxation that information is/was misstated, misrepresented or omitted or is materially
inconsistent with representations made in an application, the film office or the division of
taxation may deny the requested certification or revoke a certification previously given.
Upon revocation of any certification, the production company must surrender any and all
issued certificates or remit payment equal to the face value of any previously transferred
certificates. In such cases, the applicant may appeal the film office’s or the division of
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taxation’s decision under the provisions of RIGL §44-31.2-8.
(2) Because the circumstances of each production are unique, certifications that may
have been granted to other productions that are not specifically applicable may not be
relied on by applicants as applicable to other projects.
Rule 10. Priority and Allocation of Credits
A. (1) No more than fifteen million dollars ($15,000,000) in total may be issued for any
calendar year beginning after December 31, 2007 for motion picture tax credits pursuant
of chapter 31.2 of title 44 and/or musical and theatrical production tax credits pursuant to
chapter 31.3 of title 44. Said credits shall be equally available to motion picture
productions and musical and theatrical productions. No specific amount shall be set aside
of either type of production.
(2) Notwithstanding subsection A(1) of this rule, the tax credit for any motion picture
production shall not exceed five million dollars ($5,000,000).
(3) The tax administrator may issue a waiver of the five million dollar ($5,000,000) tax
credit cap provided:
(a) the production is a feature-length film or television series;
(b) the requested tax credits do not exceed the remaining portion of the fifteen million
dollars ($15,000,000) in total motion picture production company tax credits available for
the calendar year; and
(c) the production company meets all other conditions and requirements under these
rules and regulations.
(4) Credits shall be allocated against the cap established in subsection A(1) of this rule
for the calendar year determined by film office in the initial certification letter.
B. In order to comply with the requirements of subsection A(1) of this rule, the film
office has developed a “queuing” process, which is an equitable process that will provide
applicants some degree of certainty as to what credit amounts will be available to them at
the conclusion of a production. This queuing process shall consist of the following:
(1) Once a production has been initially certified, the film office will assign a number
to that production. Initial numbers are assigned chronologically and are based on the date
and time that a production has been initially certified. These productions will be placed in
sequence on a “first come, first served” basis. This sequence is also referred to within as
the “queue”;
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(2) Based upon the applicant’s information and availability of credit remaining for the
calendar year for which application is made, the film office shall allocate the estimated
credit amount to that production;
(3) This estimated amount will not be allocated to any other production, except as set
forth below under “loss of place in the queue”;
(4) If a production (a) falls out of “good standing status” with the Secretary of State; or
(b) halts production; or
(c) declares in writing to the film office that the estimated state certified production
costs will not be expended in Rhode Island; or
(d) fails to meet the deadlines as indicated in sub-paragraph (5), the production will lose
its place in the queue, and shall be moved to the end of the queue.
(5) In order to maintain place in the queue, filming in Rhode Island shall commence
before the elapse of sixty (60) days from the intended start date indicated on the initial
certification letter. Upon receipt of a written request the director of the film office is
allowed to extend that time for an additional thirty (30) days, for good cause shown.
Furthermore, in order to continue to be certified, the production’s filming shall begin no
more than one hundred and eighty (180) days from the start date indicated on the initial
certification letter;
(6) Upon loss of place in the queue, the estimated tax credit, which originally had been
assigned to the production, shall be released and made available to other productions in
sequence in the queue;
(7) If, at the time of initial certification, all available tax credits for the calendar year
have been claimed or otherwise assigned, a production shall be put at the end of the
queue for that calendar year’s credit, in the order of the date of initial certification;
(8) Remaining productions in the queue, which are not qualified for available tax credit
in the calendar year in which applied, must indicate in writing to the film office their
interest in renewing their applications for the next calendar year’s available tax credit.
Any renewal request for the succeeding calendar year’s available tax credit must be made
to the film office on or before December 1st of the calendar year of the original
application.
Rule 11. Commencement of Production
A. Once production has begun, the film office shall be notified in writing by the
applicant/production company that, on a specific date, the actual production, including
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the principal photography, has commenced. In the event that an applicant’s principal
photography on a state certified motion picture does not actually begin within one
hundred eighty (180) days of the start date indicated on the initial certification letter, the
applicant shall be required to resubmit the application for initial certification.
B. Recurrent Productions: If a motion picture production company produces a
television series, then production work on any given “season” of such series completed in
any one calendar year shall be considered a separate and distinct state certified
production for the purposes of certification. In the case that a motion picture production
company produces a television “pilot” or “movies of the week”, then such “pilot” or
“movie of the week” shall be considered a separate and distinct state certified production
for the purpose of the issuance of credit certificates. Any additional “season”, “pilot” or
“movie of the week” will be treated as a separate production and the applicant must
repeat the application process and the production must meet all appropriate criteria.
C. Amended Productions: In the event that the production company requests the film
office or the division of taxation to approve an amended production for a motion picture
that has already obtained final certification, the applicant must repeat the application
process and the amended production must meet all appropriate criteria.
D. Inspection Rights: The film office and the division of taxation shall have the right at
reasonable times to enter upon any set, soundstage, location or production office that is
the subject of an application for certification, whether the motion picture production is
proposed, ongoing, or completed, to verify that the motion picture production is as
represented.
Rule 12. Cost Report
A. As a part of the completed application for final certification of the production and the
basis on which the credits are calculated, the production costs and Cost Report are crucial
to the film office’s and the division of taxation’s deliberations concerning the
certification of the production. As part of the final certification, the Cost Report must be
accompanied by an “accountant’s certification” of the items to which it pertains. The film
office and the division of taxation may rely, without independent investigation, upon the
accountant’s certification confirming the accuracy of the information included in the Cost
Report as well as the motion picture production company’s compliance with RIGL §44-
31-2.2(5).
B. The cost report is a crucial part of and an attachment to the application for final
certification of a production. The cost report shall be in a format as prescribed by the tax
administrator, and must state:
(1) the date of completion of the production in the State of Rhode Island,
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(2) the amount and listing of production costs incurred and actually paid within the
State of Rhode Island with respect to the production as set forth in the rules herein, and
(3) that the total production budget is at least $100,000.
Rule 13. Determination of Tax Credit
A. The amount of the motion picture production tax credit shall be determined by the
division of taxation to equal twenty-five percent (25%) of the state certified production
costs of a completed state certified production, verified by the division of taxation. The
credit is considered earned in the tax year the production is completed.
B. The motion picture production tax credit shall be allowed as a credit against a tax
imposed by chapters 11, 14, 17 and 30 of title 44 of the General Laws of Rhode Island for
the tax year the credit is earned. Any unused credit may be carried forward for the next
three (3) succeeding tax years.
C. The division of taxation shall determine if the cost included in the cost report meets
the criteria of “costs” as defined in Rule 5. If any cost is denied, the division of taxation
shall advise the applicant of the denial in writing, citing the reasons for the denial.
Rule 14. Issuance of Tax Credit Certificates
A. Concurrent with the final certification of the production, the division of taxation,
based upon the Certification shall also issue written, individual motion picture production
tax credit certificate[s] to the motion picture production company, as allocated under its
organizational documents, or to one or more transferees. The motion picture production
company must provide the names, addresses and taxpayer identification numbers of such
Participants or transferees. Credits allowed to a motion picture production company
which is a subchapter S-corporation, partnership, or limited liability company that is
taxed as a partnership, shall be passed through respectively to the Participants on a pro
rata basis or pursuant to an executed agreement among such persons designated as
subchapter S-corporation shareholders, partners, or members. This writing documents an
alternate distribution method without regard to their sharing of other tax or economic
attributes of such entity. Each certificate will bear the unique identification number that
was issued to the production as part of its initial certification.
B. Right to Deny or Revoke Credit - If, at any time, it comes to the attention of the film
office or the division of taxation that information is/was misstated, misrepresented or
omitted or is materially inconsistent with representations made in an application, the film
office or the division of taxation may deny the requested certification or revoke a
certification previously given. In such cases, the applicant may appeal the film office’s or
the division of taxation’s decision under the provisions of RIGL §44-31.2-8.
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C. In relation to granting the credit, any motion picture production company applying
for the credit shall be required to reimburse the division of taxation for its audits.
(1) The reimbursement shall be at the rate of one quarter of one percent (0.25%) of the
final audited certified production costs and shall not exceed the amount of $5,000.
(2) Such reimbursement shall be paid to the Rhode Island division of taxation prior to
the issuance of any tax credit certificates.
Rule 15. Hearings and Appeals
A. From an action of the film office. For matters pertaining exclusively to application,
production, and certification of motion picture productions, any person aggrieved by a
denial action of the film office under chapter 44-31.2 shall notify the director of the film
office in writing, within thirty (30) days from the date of mailing of the notice of denial
action by the film office and request a hearing relative to the denial or action. The
director of the film office shall, as soon as is practicable, fix a time and place of hearing.
Following the hearing the direct of the film office shall render a final decision. Appeals
from a final decision of the director of the film office under chapter 44-31.2 are to the
sixth (6th) division district court pursuant to chapter 35 of title 42 of the general laws.
B. From denial of tax credit or a portion thereof. Any person aggrieved by the tax
administrator's denial of a tax credit or tax benefit under chapter 44-31.2 shall notify the
tax administrator in writing within thirty (30) days from the date of mailing of the notice
of denial of the tax credit and request a hearing relative to the denial of the tax credit. The
tax administrator shall, as soon as is practicable, fix a time and place for a hearing.
Following the hearing the tax administrator shall render a final decision. Appeals from a
final decision of the tax administrator under chapter 44-31.2 are to the sixth (6th) division
district court pursuant to chapter 8 of title 8 of the general laws. The taxpayer's right to
appeal is expressly made conditional upon prepayment of all taxes, interest, and
penalties, unless the taxpayer files a timely motion for exemption from prepayment with
the district court in accordance with the requirements imposed pursuant to § 8-8-26 of the
general laws.
Rule 16. Assignment of Tax Credit Certificates
A. Each motion picture production tax credit certificate may be assigned, with or
without consideration, transferred, or sold if it has not been previously claimed, in whole
or in part, against the taxes of the motion picture production company or the taxes of the
owner of the certificate. A single transfer or sale may involve one or more transferees,
assignees or purchasers. The transferors and sellers must submit notice of the assignment,
transfer or sale within thirty (30) days of the sale of transfer to the tax administrator. The
division of taxation shall assess and collect an administrative fee of two hundred dollars
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($200) for issuing multiple tax credit certificates or for reissuing certificates. In addition,
the division of taxation will also collect an administrative fee of two hundred dollars
($200) on behalf of the film office.
B. Assignment of Certificate: A motion picture production tax credit certificate may be
assigned, transferred or sold to any person, whether or not such person has an ownership
interest in the state certified production, provided that no credit has been claimed based
on the certificate being assigned, transferred or sold. The certificate shall be assigned by
endorsing the assignment clause on the certificate and delivery of the original certificate
to the assignee, transferee or purchaser.
C. Notification of Assignment: (1) It shall be required that written notification is filed
with the division of taxation of the assignment, transfer or sale, of all or a portion the
motion picture production tax credit certificates. Notification submitted to the tax
division shall be done in accordance with the rules herein. Failure to comply will result in
the disallowance of the credit until the taxpayer is in full compliance.
(2) Notice to the tax division shall include:
(a) a copy of the credit certificate, endorsed to the assignee. The original certificate
shall not be included with the notification since it must be retained by the assignee,
transferee or purchaser and attached to his/her/their/its tax return for the year for which
credit is claimed;
(b) the name, address and telephone number of the assignor, transferor or seller and
those of the assignee, transferee or purchaser;
(c) the taxpayer identification number or social security number of the parties; in
addition, for non-resident corporations, partnerships, limited liability companies, or other
entities the name and address of such entity’s registered agent in Rhode Island and
evidence of qualification to do business in Rhode Island.
D. Multiple Assignees; Re-issuance of Certificate - If the holder or assignee of a credit
certificate has not used the credit certificate, in whole or in part, against its taxes and
desires to assign, transfer or sell its interest in the credit to more than one party, the
holder must request the division of taxation to reissue the original certificate in such
number of certificates as the holder requires. The request must be in writing, must specify
the number of new certificates required and the amount to be specified on each
certificate, and must attach the original certificate for cancellation by the division of
taxation.
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Rule 17. Sunset
As provided in RIGL § 44-31.2-11, no credits shall be issued after July 1, 2019 unless the
production has received initial certification under RIGL subsection 44-31.2-6(a) prior to
July 1, 2019.
Rule 18. Effective Date
These regulations shall take effect December 1, 2013 and shall amend and supersede
regulation CR 09-01 (ERLID #5460) promulgated on January 1, 2009.
DAVID M. SULLIVAN
TAX ADMINISTRATOR