Chapter 122:21-1 General Provisions
The following definitions are applicable to the rules set forth in this chapter of the Administrative Code as well as the guidelines, application and other materials of the Motion Picture Tax Credit Program approved by the director.
(A) "Above-the-line talent" means all principal cast, writers, directors, and producers working in the production.
(B) "Applicant" means a motion picture company that files an application with the director to certify a motion picture production as a tax credit-eligible production pursuant to section 122.85 of the Revised Code.
(C) "Below-the-line talent" means employees in the production other than principal cast, writers, directors, and producers.
(D) "Director" means the director of the Ohio department of development.
(E) "Distribution plan" means the plan for any theatrical, television, movie of the week, internet, and festival submission of the production.
(F) "Green lit" means the production has been certified in writing by the applicant to begin production.
(G) "First pre-production date" means ninety days prior to principal photography.
(H) "Loan-out talent" means cast or crew who provides services to a tax credit-eligible production who are not employed by the applicant, but are loaned to the applicant for the purposes of performing production tasks for the tax credit-eligible production. Payments to the individual or corporation employing the loan-out talent, to the extent qualified, are eligible production expenditures provided the individual or corporation actually employing the cast or crew register with Ohio secretary of state.
(I) "Resident cast and crew wages" means pretax wages paid to the Ohio-resident individuals employed as cast or crew of the tax credit-eligible production, including the contract amount of loan-out talent and any other employment contracts. For purposes of this chapter, wages also includes the dollar value of employer contributions to Ohio resident pension, health and welfare benefits, holiday, and vacation to the extent included in wages.
(J) "Non-resident cast and crew wages" means pretax wages paid to individuals who are not Ohio residents employed as cast or crew of the tax credit-eligible productions, including the contract amount of loan-out talent and any other employment contracts. For purposes of this chapter, wages also includes the dollar value of employer contributions to pension, health and welfare benefits, holiday, and vacation to the extent included in wages.
(K) "Reviewable progress" means the particular steps leading to the implementation of the tax credit eligible production have been undertaken and are continuing or accomplished as demonstrated by objective evidence which be documentary or otherwise. For example, a production report indicating the specific production tasks are under way, documentation for production financing is complete or, pre-production approvals have been received.
(L) "Shooting days" means days of principal photography for the production.
(A) An applicant who is a corporation, partnership, limited liability company, or other form or business entity must be registered with the Ohio secretary of state to do business in Ohio.
(B) Any application submitted must be submitted on a form prescribed by the director and meet the requirements set forth in division (B) of section 122.85 of the Revised Code and the budgetary requirements of division (C) of section 122.85 of the Revised Code.
(C) Eligible production expenditures shall be as authorized by section 122.85 of the Revised Code, which does not include alcoholic beverages. Eligible production expenditures shall not include the expenditures for the purchase of alcoholic beverages.
(D) The application must include a certification by the applicant that the production does not require records to be maintained under 18 United States Code 2257 with respect to sexually explicit content.
(E) The application process shall include the following steps:
(1) The application must be verified for completeness by the director.
(2) Within sixty days of the determination of completeness, the director shall review and make a determination as to whether the application may be certified as a tax credit eligible production.
(3) Upon review of the application, the director may request clarification or supplemental information about the production. The applicant must respond to the director within thirty days after the date of the request.
(4) Upon completion of the review, the director shall notify the applicant in writing of the determination of tax credit eligibility.
(F) The director may use his or her discretion when evaluating applications to ensure geographic distribution of tax credit eligible productions throughout Ohio.
(A) Upon certification by the director that the project proposed by the applicant is a tax credit-eligible production, the director shall issue the applicant an invoice for a non-refundable application fee in an amount equal to one-half per cent of the estimated value of the credit, as calculated in section four of the application, up to a maximum application fee of ten thousand dollars.
(B) The applicant shall pay the non-refundable fee within forty-five days of the invoice date.
(C) The applicant's failure to pay the application fee within the timeframe proscribed above shall result in rescission of the director's certification that the application is a tax credit-eligible production.
(D) An application fee is due and payable for each production certified by the director as a tax credit-eligible production and is not transferrable to any other or future application or production.
(A) Reviewable progress reports in a format acceptable to the director shall be due within ninety days of certification of the application as a tax credit-eligible production as required within division (B) of section 122.85 of the Revised Code. The director may, from time to time in his or her discretion, request in writing additional reviewable progress reports after ninety days of certification of the application as a tax credit eligible production. The applicant's failure to report to the director or failure to demonstrate reviewable progress in a report to the director may result in rescission of the director's certification of the production as a tax credit-eligible production.
(B) The independent certified public accountant report due to the director under division (D) of section 122.85 of the Revised Code shall certify to the director that the applicant's reported costs of a tax credit- eligible production are eligible production expenditures as defined in section 122.85 of the Revised Code. In addition, the independent certified public accountant shall:
(1) Certify to the director that the loan-out talent contractors are registered with the Ohio secretary of state to do business in Ohio;
(2) Review and certify to the director all contract and expense items greater than or equal to ten-thousand dollars and review and certify to the director no less than fifty per cent of the contracts and expense items less than ten thousand dollars;
(3) Certify to the director that all eligible production expenditures for the tax credit eligible production were incurred during the period July 1, 2009 to the production complete date; and
(4) Certify to the director that the goods and services claimed as eligible production expenditures were performed or consumed in Ohio.
(C) The costs of the certified public accountant's report shall not qualify as an eligible production expenditure.
(D) Within sixty days of receipt of the independent certified public accountant's report, the director shall review and provide a written notice to the applicant accepting the report or identifying any deficiencies in the report, and if the report is accepted, identifying any disallowance of expenditures claimed and providing the reason for any disallowance. If the report does not satisfy the reporting requirements, the applicant shall have thirty days after the notice date to cause the independent certified public accountant to remedy the identified deficiencies. Also, within thirty days of receipt of the director's notice of any disallowed expenditure, the applicant may request reconsideration and provide additional documentation in support of the report. The director shall consider all relevant information submitted and respond in writing. Upon reconsideration, the director's determination shall be final.
(E) If the applicant fails to provide a report of an independent certified public accountant within the time allowed by this rule and complying with the requirements of this rule, no tax credit certificate will be issued.
(A) The credit certificate shall be issued to the applicant as the certificate owner and shall not be transferable. If the certificate owner is a pass through entity, such as a partnership, S-corporation, limited liability company (LLC), or other such pass through entity, the pass through entity shall provide the director a list of partners or members, including the correct legal name, taxpayer identification number, and proportion of ownership interest in the entity for allocation of the tax credit.
(B) No credit certificate shall be issued before the completion of the tax credit eligible production. A tax credit-eligible production is not considered complete until all costs of the production and creditors have been paid in full, or as otherwise agreed. Upon acceptance of the accountant's report as provided in rule 122:21-1-04 of the Administrative Code, the director will issue a credit certificate in an amount equal to the lesser of the budgeted eligible production expenditures stated in the application and the director's certification of the tax credit-eligible production or the actual eligible production expenditures incurred and certified by the independent certified public accountant.
(E) No application will be certified as a tax credit-eligible production if the total budgeted eligible production expenditures stated in the motion picture company's application is less than three hundred thousand dollars. In addition, if the actual eligible production expenditures as finally determined under division (D) of section 122.85 of the Revised Code is less than three hundred thousand dollars, the certification of the production as a tax credit eligible production will be rescinded and no credit will be allowed.