Read the full stored bill text
As Introduced
136th
General Assembly
Regular
Session
S. B. No. 159
2025-2026
Senators Patton, Timken
Cosponsors: Senators Lang, O'Brien,
Antonio, Smith
To
amend sections 122.85, 5726.98, 5747.98, and 5751.98 and to repeal
sections 122.852, 5726.59, 5747.67, and 5751.55 of the Revised Code
to
modify the film and theater production tax credit and to repeal the
film and theater capital improvement tax credit.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section
1.
That
sections 122.85, 5726.98, 5747.98, and 5751.98 of the Revised Code be
amended to read as follows:
Sec.
122.85.
(A)
As used in this section and in sections 5726.55, 5733.59, 5747.66,
and 5751.54 of the Revised Code:
(1)
"Tax credit-eligible production" means a motion picture or
broadway theatrical production certified by the director of
development under division (B) of this section as qualifying the
production company for a tax credit under section 5726.55, 5733.59,
5747.66, or 5751.54 of the Revised Code.
(2)
"Certificate owner" means a production company to which a
tax credit certificate is issued.
(3)
"Production company" means an individual, corporation,
partnership, limited liability company, or other form of business
association that is registered with the secretary of state and that
is producing a motion picture or broadway theatrical production.
(4)
"Eligible expenditures" means expenditures made after June
30, 2009, for goods or services purchased and consumed in this state
by a production company directly for the production of a tax
credit-eligible production, for postproduction activities, or for
advertising and promotion of the production.
"Eligible
expenditures" do not include qualified expenditures for which a
production company receives a tax credit under section 122.852 of the
Revised Code.
"Eligible
expenditures" include expenditures for cast and crew wages,
accommodations, costs of set construction and operations, editing and
related services, photography, sound synchronization, lighting,
wardrobe, makeup and accessories, film processing, transfer, sound
mixing, special and visual effects, music, location fees, and the
purchase or rental of facilities and equipment.
(5)
"Motion picture" means entertainment content created in
whole or in part within this state for distribution or exhibition to
the general public, including, but not limited to, feature-length
films; documentaries; long-form, specials, miniseries, series, and
interstitial television programming; interactive web sites; sound
recordings; videos; music videos; interactive television; interactive
games; video games; commercials; any format of digital media; and any
trailer, pilot, video teaser, or demo created primarily to stimulate
the sale, marketing, promotion, or exploitation of future investment
in either a product or a motion picture by any means and media in any
digital media format, film, or videotape, provided the motion picture
qualifies as a motion picture. "Motion picture" does not
include any television program created primarily as news, weather, or
financial market reports, a production featuring current events or
sporting events, an awards show or other gala event, a production
whose sole purpose is fundraising, a long-form production that
primarily markets a product or service or in-house corporate
advertising or other similar productions, a production for purposes
of political advocacy, or any production for which records are
required to be maintained under 18 U.S.C. 2257 with respect to
sexually explicit content.
(6)
"Broadway theatrical production" means a prebroadway
production, long run production, or tour launch that is directed,
managed, and performed by a professional cast and crew and that is
directly associated with New York city's broadway theater district.
(7)
"Prebroadway production" means a live stage production that
is scheduled for presentation in New York city's broadway theater
district after the original or adaptive version is performed in a
qualified production facility.
(8)
"Long run production" means a live stage production that is
scheduled to be performed at a qualified production facility for more
than five weeks, with an average of at least six performances per
week.
(9)
"Tour launch" means a live stage production for which the
activities comprising the technical period are conducted at a
qualified production facility before a tour of the original or
adaptive version of the production begins.
(10)
"Qualified production facility" means a facility located in
this state that is used in the development or presentation to the
public of theater productions.
(11)
"Investment intent letter" means a letter that satisfies
all of the following:
(a)
Is executed on official letterhead of the production company,
investor, or investment entity;
(b)
Clearly states the amount of investment being committed;
(c)
Specifies the date on which the investment is to be made available;
(d)
Identifies the motion picture or broadway theatrical production to
which the funds are allocated.
(B)
For the purpose of encouraging and developing strong film and theater
industries in this state, the director of development may certify a
motion picture or broadway theatrical production produced by a
production company as a tax credit-eligible production. In the case
of a television series, the director may certify the production of
each episode of the series as a separate tax credit-eligible
production. A production company shall apply for certification of a
motion picture or broadway theatrical production as a tax
credit-eligible production on a form and in the manner prescribed by
the director. Each application shall include the following
information:
(1)
The name and telephone number of the production company;
(2)
The name and telephone number of the company's contact person;
(3)
A list of the first preproduction date through the last production
and postproduction dates in Ohio and, in the case of a broadway
theatrical production, a list of each scheduled performance in a
qualified production facility;
(4)
The Ohio production office or qualified production facility address
and telephone number;
(5)
The total production budget;
(6)
The total budgeted eligible expenditures and the percentage that
amount is of the total production budget of the motion picture or
broadway theatrical production;
(7)
In the case of a motion picture, the total percentage of the
production being shot in Ohio;
(8)
The level of employment of cast and crew who reside in Ohio;
(9)
A synopsis of the script;
(10)
In the case of a motion picture, the shooting script;
(11)
A creative elements list that includes the names of the principal
cast and crew and the producer and director;
(12)
Documentation of financial ability to undertake and complete the
motion picture or broadway theatrical production, including
documentation that shows that the company has secured funding equal
to at least fifty per cent of the total production budget
,
which may be in the form of an investment intent letter
;
(13)
Estimated value of the tax credit based upon total budgeted eligible
expenditures;
(14)
Estimated amount of state and local taxes to be generated in this
state from the production;
(15)
Estimated economic impact of the production in this state;
(16)
Any other information considered necessary by the director.
Within
ninety days after certification of a motion picture or broadway
theatrical production as a tax credit-eligible production, and any
time thereafter upon the request of the director, the production
company shall present to the director sufficient evidence of
reviewable progress. If the production company fails to present
sufficient evidence, the director may rescind the certification. If
the production of a motion picture or broadway theatrical production
does not begin within ninety days after the date it is certified as a
tax credit-eligible production, the director shall rescind the
certification unless the director finds that the production company
shows good cause for the delay, meaning that the production was
delayed due to unforeseeable circumstances beyond the production
company's control or due to action or inaction by a government
agency. Upon rescission, the director shall notify the applicant that
the certification has been rescinded. Nothing in this section
prohibits an applicant whose tax credit-eligible production
certification has been rescinded from submitting a subsequent
application for certification.
(C)(1)
A production company whose motion picture or broadway theatrical
production has been certified as a tax credit-eligible production may
apply to the director of development on or after July 1, 2009, for a
refundable credit against the tax imposed by section 5726.02,
5733.06, 5747.02, or 5751.02 of the Revised Code. The director in
consultation with the tax commissioner shall prescribe the form and
manner of the application and the information or documentation
required to be submitted with the application.
The
credit is determined as follows:
(a)
If the total budgeted eligible expenditures stated in the application
submitted under division (B) of this section or the actual eligible
expenditures as finally determined under division (D) of this
section, whichever is least, is less than or equal to three hundred
thousand dollars, no credit is allowed;
(b)
If the total budgeted eligible expenditures stated in the application
submitted under division (B) of this section or the actual eligible
expenditures as finally determined under division (D) of this
section, whichever is least, is greater than three hundred thousand
dollars, the credit equals thirty per cent of the least of such
budgeted or actual eligible expenditure amounts.
(2)
Except as provided in division (C)(4) of this section, if the
director of development approves a production company's application
for a credit, the director shall issue a tax credit certificate to
the company. The director in consultation with the tax commissioner
shall prescribe the form and manner of issuing certificates. The
director shall assign a unique identifying number to each tax credit
certificate and shall record the certificate in a register devised
and maintained by the director for that purpose. The certificate
shall state the amount of the eligible expenditures on which the
credit is based and the amount of the credit. Upon the issuance of a
certificate, the director shall certify to the tax commissioner the
name of the production company to which the certificate was issued,
the amount of eligible expenditures shown on the certificate, the
amount of the credit, and any other information required by the rules
adopted to administer this section.
(3)
The amount of eligible expenditures for which a tax credit may be
claimed is subject to inspection and examination by the tax
commissioner or employees of the commissioner under section 5703.19
of the Revised Code and any other applicable law. Once the eligible
expenditures are finally determined under section 5703.19 of the
Revised Code and division (D) of this section, the credit amount is
not subject to adjustment unless the director determines an error was
committed in the computation of the credit amount.
(4)
No tax credit certificate may be issued before the completion of the
tax credit-eligible production. The amount of tax credit allowed per
fiscal year shall not exceed the sum of
(a)
fifty
one
hundred
million
dollars
,
(b) the difference between the maximum credit amount for that fiscal
year under section 122.852 of the Revised Code and the amount the
director of development elects to allow under this section pursuant
to division (D)(1) of section 122.852 of the Revised Code,
and
(c)
the
difference between the maximum amount of credits that could have been
awarded in the previous fiscal year under this section and the amount
actually awarded. Out of that sum, five million dollars shall be
reserved for broadway theatrical productions, and the balance may be
allowed for any tax credit-eligible production. For any fiscal year
in which less than five million dollars of tax credits are allowed
for broadway theatrical productions, the amount of the five million
dollars not allowed and added to the maximum annual amount for the
following fiscal year shall be reserved for broadway theatrical
productions in the following fiscal year.
(5)
The
Except
as otherwise provided in this division, the
director
shall review and approve applications for tax credits
in
two rounds
each
fiscal year
on a first-come, first-served, basis
.
The
first round of credits shall be awarded not later than the last day
of July of the fiscal year, and the second round of credits shall be
awarded not later than the last day of the ensuing January. The
amount of credits awarded in the first round of applications each
fiscal year shall not exceed one-half of the maximum allowance for
the fiscal year calculated
If,
at any time, all complete and pending, but unapproved, applications
would, if all approved, result in awarded credits in excess of the
limit established
under
division (C)(4) of this section,
two
million five hundred thousand dollars of which shall be reserved for
broadway theatrical productions. For each round,
the
director shall rank
the
complete and pending
applications
on the basis of the extent of positive economic impact each tax
credit-eligible production is likely to have in this state and the
effect on developing a permanent workforce in motion picture or
theatrical production industries in the state. For the purpose of
such ranking, the director shall give priority to tax-credit eligible
productions that are television series or miniseries due to the
long-term commitment typically associated with such productions. The
economic impact ranking shall be based on the production company's
total expenditures in this state directly associated with the tax
credit-eligible production. The effect on developing a permanent
workforce in the motion picture or theatrical production industries
shall be evaluated first by the number of new jobs created and second
by amount of payroll added with respect to employees in this state.
The
When
ranking is required under this division, the
director
shall approve productions in the order of their ranking, from those
with the greatest positive economic impact and workforce development
effect to those with the least positive economic impact and workforce
development effect.
(D)
A production company whose motion picture or broadway theatrical
production has been certified as a tax credit-eligible production
shall engage, at the company's expense, an independent certified
public accountant to examine the company's production,
postproduction, and advertising and promotion expenditures to
identify the expenditures that qualify as eligible expenditures.
The
certified public accountant shall 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 not less than fifty
per cent of the contracts and expense items less than ten thousand
dollars.
The
certified public accountant shall
then
issue a report to the company and to the director of development
certifying the company's eligible expenditures
and any other information required by the director
.
Upon receiving and examining the report, the director may disallow
any expenditure the director determines is not an eligible
expenditure. If the director disallows an expenditure, the director
shall issue a written notice to the production company stating that
the expenditure is disallowed and the reason for the disallowance.
Upon examination of the report and disallowance of any expenditures,
the director shall determine finally the lesser of the total budgeted
eligible expenditures stated in the application submitted under
division (B) of this section or the actual eligible expenditures for
the purpose of computing the amount of the credit.
(E)
No credit shall be allowed under section 5726.55, 5733.59, 5747.66,
or 5751.54 of the Revised Code unless the director has reviewed the
report and made the determination prescribed by division (D) of this
section.
(F)
This state reserves the right to refuse the use of this state's name
in the credits of any tax credit-eligible motion picture production
or program of any broadway theatrical production.
(G)(1)
The director of development in consultation with the tax commissioner
shall adopt rules for the administration of this section, including
rules setting forth and governing the criteria for determining
whether a motion picture or broadway theatrical production is a tax
credit-eligible production; activities that constitute the production
or postproduction of a motion picture or broadway theatrical
production; reporting sufficient evidence of reviewable progress;
expenditures that qualify as eligible expenditures; a schedule and
deadlines for applications to be submitted and reviewed; a
competitive process for approving credits based on likely economic
impact in this state and development of a permanent workforce in
motion picture or theatrical production industries in this state;
consideration of geographic distribution of credits; and
implementation of the program described in division (H) of this
section. The rules shall be adopted under Chapter 119. of the Revised
Code.
(2)
To cover the administrative costs of the program, the director shall
require each applicant to pay an application fee equal to the lesser
of ten thousand dollars or one per cent of the estimated value of the
tax credit as stated in the application. The fees collected shall be
credited to the tax incentives operating fund created in section
122.174 of the Revised Code. All grants, gifts, fees, and
contributions made to the director for marketing and promotion of the
motion picture industry within this state shall also be credited to
the fund.
(H)
The director of development shall establish a program for the
training of Ohio residents who are or wish to be employed in the film
or multimedia industry. Under the program, the director shall:
(1)
Certify individuals as film and multimedia trainees. In order to
receive such a certification, an individual must be an Ohio resident,
have participated in relevant on-the-job training or have completed a
relevant training course approved by the director, and have met any
other requirements established by the director.
(2)
Accept applications from production companies that intend to hire and
provide on-the-job training to one or more certified film and
multimedia trainees who will be employed in the company's tax
credit-eligible production;
(3)
Upon completion of a tax-credit eligible production, and upon the
receipt of any salary information and other documentation required by
the director, authorize a reimbursement payment to each production
company whose application was approved under division (H)(2) of this
section. The payment shall equal fifty per cent of the salaries paid
to film and multimedia trainees employed in the production.
Sec.
5726.98.
(A)
To provide a uniform procedure for calculating the amount of tax due
under section 5726.02 of the Revised Code, a taxpayer shall claim any
credits to which the taxpayer is entitled under this chapter in the
following order:
The
nonrefundable job retention credit under division (B) of section
5726.50 of the Revised Code;
The
nonrefundable credit for purchases of qualified low-income community
investments under section 5726.54 of the Revised Code;
The
nonrefundable credit for qualified research expenses under section
5726.56 of the Revised Code;
The
nonrefundable credit for qualifying dealer in intangibles taxes under
section 5726.57 of the Revised Code;
The
nonrefundable Ohio low-income housing tax credit under section
5726.58 of the Revised Code;
The
nonrefundable affordable single-family home credit under section
5726.60 of the Revised Code;
The
nonrefundable welcome home Ohio (WHO) program credit under section
122.633 of the Revised Code;
The
nonrefundable opportunity zone investment credit under section
5726.61 of the Revised Code;
The
refundable credit for rehabilitating an historic building under
section 5726.52 of the Revised Code;
The
refundable job retention or job creation credit under division (A) of
section 5726.50 of the Revised Code;
The
refundable credit under section 5726.53 of the Revised Code for
losses on loans made under the Ohio venture capital program under
sections 150.01 to 150.10 of the Revised Code;
The
refundable motion picture and broadway theatrical production credit
under section 5726.55 of the Revised Code
;
The
refundable credit for film and theater capital improvement projects
under section 5726.59 of the Revised Code
.
(B)
For any credit except the refundable credits enumerated in this
section, the amount of the credit for a taxable year shall not exceed
the tax due after allowing for any other credit that precedes it in
the order required under this section. Any excess amount of a
particular credit may be carried forward if authorized under the
section creating that credit. Nothing in this chapter shall be
construed to allow a taxpayer to claim, directly or indirectly, a
credit more than once for a taxable year.
Sec.
5747.98.
(A)
To provide a uniform procedure for calculating a taxpayer's aggregate
tax liability under section 5747.02 of the Revised Code, a taxpayer
shall claim any credits to which the taxpayer is entitled in the
following order:
Either
the retirement income credit under division (B) of section 5747.055
of the Revised Code or the lump sum retirement income credits under
divisions (C), (D), and (E) of that section;
Either
the senior citizen credit under division (F) of section 5747.055 of
the Revised Code or the lump sum distribution credit under division
(G) of that section;
The
dependent care credit under section 5747.054 of the Revised Code;
The
credit for displaced workers who pay for job training under section
5747.27 of the Revised Code;
The
campaign contribution credit under section 5747.29 of the Revised
Code;
The
twenty-dollar personal exemption credit under section 5747.022 of the
Revised Code;
The
joint filing credit under division
(G)
(E)
of section 5747.05 of the Revised Code;
The
earned income credit under section 5747.71 of the Revised Code;
The
nonrefundable credit for education expenses under section 5747.72 of
the Revised Code;
The
nonrefundable credit for donations to scholarship granting
organizations under section 5747.73 of the Revised Code;
The
nonrefundable credit for tuition paid to a nonchartered nonpublic
school under section 5747.75 of the Revised Code;
The
nonrefundable vocational job credit under section 5747.057 of the
Revised Code;
The
nonrefundable job retention credit under division (B) of section
5747.058 of the Revised Code;
The
enterprise zone credit under section 5709.66 of the Revised Code;
The
credit for beginning farmers who participate in a financial
management program under division (B) of section 5747.77 of the
Revised Code;
The
credit for commercial vehicle operator training expenses under
section 5747.82 of the Revised Code;
The
nonrefundable welcome home Ohio (WHO) program credit under section
122.633 of the Revised Code;
The
credit for selling or renting agricultural assets to beginning
farmers under division (A) of section 5747.77 of the Revised Code;
The
credit for purchases of qualifying grape production property under
section 5747.28 of the Revised Code;
The
small business investment credit under section 5747.81 of the Revised
Code;
The
nonrefundable lead abatement credit under section 5747.26 of the
Revised Code;
The
opportunity zone investment credit under section 5747.86 of the
Revised Code;
The
enterprise zone credits under section 5709.65 of the Revised Code;
The
research and development credit under section 5747.331 of the Revised
Code;
The
credit for rehabilitating a historic building under section 5747.76
of the Revised Code;
The
nonrefundable Ohio low-income housing tax credit under section
5747.83 of the Revised Code;
The
nonrefundable affordable single-family home credit under section
5747.84 of the Revised Code;
The
nonresident credit under division (A) of section 5747.05 of the
Revised Code;
The
credit for a resident's out-of-state income under division (B) of
section 5747.05 of the Revised Code;
The
refundable motion picture and broadway theatrical production credit
under section 5747.66 of the Revised Code;
The
refundable credit for film and theater capital improvement projects
under section 5747.67 of the Revised Code;
The
refundable jobs creation credit or job retention credit under
division (A) of section 5747.058 of the Revised Code;
The
refundable credit for taxes paid by a qualifying entity granted under
section 5747.059 of the Revised Code;
The
refundable credits for taxes paid by a qualifying pass-through entity
granted under division (I) of section 5747.08 of the Revised Code;
The
refundable credit under section 5747.80 of the Revised Code for
losses on loans made to the Ohio venture capital program under
sections 150.01 to 150.10 of the Revised Code;
The
refundable credit for rehabilitating a historic building under
section 5747.76 of the Revised Code;
The
refundable credit under section 5747.39 of the Revised Code for taxes
levied under section 5747.38 of the Revised Code paid by an electing
pass-through entity.
(B)
For any credit, except the refundable credits enumerated in this
section and the credit granted under division (H) of section 5747.08
of the Revised Code, the amount of the credit for a taxable year
shall not exceed the taxpayer's aggregate amount of tax due under
section 5747.02 of the Revised Code, after allowing for any other
credit that precedes it in the order required under this section. Any
excess amount of a particular credit may be carried forward if
authorized under the section creating that credit. Nothing in this
chapter shall be construed to allow a taxpayer to claim, directly or
indirectly, a credit more than once for a taxable year.
Sec.
5751.98.
(A)
To provide a uniform procedure for calculating the amount of tax due
under this chapter, a taxpayer shall claim any credits to which it is
entitled in the following order:
The
nonrefundable jobs retention credit under division (B) of section
5751.50 of the Revised Code;
The
nonrefundable credit for qualified research expenses under division
(B) of section 5751.51 of the Revised Code;
The
nonrefundable credit for a borrower's qualified research and
development loan payments under division (B) of section 5751.52 of
the Revised Code;
The
nonrefundable credit for calendar years 2010 to 2029 for unused net
operating losses under division (B) of section 5751.53 of the Revised
Code;
The
refundable motion picture and broadway theatrical production credit
under section 5751.54 of the Revised Code;
The
refundable credit for film and theater capital improvement projects
under section 5751.55 of the Revised Code;
The
refundable jobs creation credit or job retention credit under
division (A) of section 5751.50 of the Revised Code;
The
refundable credit for calendar year 2030 for unused net operating
losses under division (C) of section 5751.53 of the Revised Code.
(B)
For any credit except the refundable credits enumerated in this
section, the amount of the credit for a tax period shall not exceed
the tax due after allowing for any other credit that precedes it in
the order required under this section. Any excess amount of a
particular credit may be carried forward if authorized under the
section creating the credit.
Section
2.
That
existing sections 122.85, 5726.98, 5747.98, and 5751.98 of the
Revised Code are hereby repealed.
Section
3.
That
sections 122.852, 5726.59, 5747.67, and 5751.55 of the Revised Code
are hereby repealed.