15-31-1007. (Temporary) Tax credit for media production. (1) Subject to 15-31-1010 and through the tax year ending December 31, 2029, a production company and its affiliates are allowed a credit against the taxes imposed by chapter 30 and this chapter for investments in a state-certified production approved by the department of commerce as provided in 15-31-1004 and 15-31-1005. The credit is for the base investment made up to 6 months before state certification through completion of the project. The credit must be claimed for the period July 1, 2019, through December 31, 2020, in which the production expenditures were incurred or the compensation was paid unless the credit is transferred to the next tax year because the limits provided for in 15-31-1010 have been met. For periods after December 31, 2020, the credit must be claimed for the year in which the production expenditures were incurred or the compensation was paid unless the credit is transferred to the next tax year because the limits provided for in 15-31-1010 have been met.
(2) To claim the credit provided for in this section:
(a) the production company or its affiliate must have applied to the department of commerce as provided in 15-31-1005 and been approved to claim or transfer the credit; or
(b) the taxpayer must be the entity to which a credit approved pursuant to 15-31-1005 and this section was transferred.
(3) (a) The credit is equal to 20% of the production expenditures in the state in the tax year, plus the additional amounts provided for in subsection (3)(b), but may not in the aggregate exceed 35% of the production company's base investment in the tax year.
(b) Additional amounts for which the credit may be claimed are:
(i) 25% of the compensation paid per production or season of a television series to each crew member or production staff member who is a resident, not to exceed a $150,000 credit per person;
(ii) 15% of the compensation paid per production or season of a television series to each crew member or production staff member who is not a resident but for whom Montana income taxes have been withheld, not to exceed a $150,000 credit per person;
(iii) 20% of the first $7.5 million of compensation paid per production or season of a television series to each actor, director, producer, or writer for whom Montana income taxes have been withheld;
(iv) 30% of compensation paid per production or season of a television series to a student enrolled in a Montana college or university who works on the production for college credit. The credit may not exceed $50,000 per student. If a credit provided for in this subsection (3)(b)(iv) is claimed for an enrolled student, the credits provided for in subsections (3)(b)(i) through (3)(b)(iii) may not be claimed for the same enrolled student.
(v) an additional 10% of payments made to a Montana college or university for stage rentals, equipment rentals, or location fees for filming on campus;
(vi) an additional 10% of all in-studio facility and equipment rental expenditures incurred in this state for a production that rents a studio for 20 days or more;
(vii) an additional 5% for production expenditures made in an underserved area; and
(viii) an additional 5% of the base investment in the state if the state-certified production includes a Montana screen credit furnished by the state as provided in 15-31-1004(7).
(4) If one production company makes a production expenditure to hire another production company to produce a project or contribute elements of a project for pay, the hired production company is considered a service provider for the hiring company and the hiring company is entitled to claim the credit for all expenditures that are incurred in the state.
(5) Any unused credit may be carried forward for 5 years or may be transferred as provided in 15-31-1008. The credit allowed by this section, including a transferred credit, may not be refunded if the taxpayer has a tax liability less than the amount of the credit.
(6) A taxpayer claiming a credit shall include with the tax return the following information:
(a) the amount of tax credit claimed and transferred for the tax year;
(b) the amount of the tax credit previously claimed or transferred;
(c) the amount of the tax credit carried over from a previous tax year; and
(d) the amount of the tax credit to be carried over to a subsequent tax year.
(7) (a) A taxpayer claiming the credit provided for in this section must claim the credit as provided in subsection (7)(b).
(b) (i) An entity taxed as a corporation for Montana income tax purposes shall claim the credit on its corporate income tax return.
(ii) Individuals, estates, and trusts shall claim a credit allowed under this section on their individual income tax return.
(iii) An entity not taxed as a corporation shall claim the credit allowed under this section on member or partner returns as follows:
(A) corporate partners or members shall claim their share of the credit on their corporate income tax returns;
(B) individual partners or members shall claim their share of the credit on their individual income tax returns; and
(C) partners or members that are estates or trusts shall claim their share of the credit on their fiduciary income tax returns.
(c) In order to prevent disguised sales of the credit provided for in this section, allocations of credits through partnership and membership agreements may not be recognized unless they have a substantial economic effect as that term is defined in 26 U.S.C. 704 and applicable federal regulations.
(8) The credit allowed under this section may not be claimed by a taxpayer if the taxpayer has included the amount of the production expenditure or compensation on which the amount of the credit was computed as a deduction under 15-30-2131 or 15-31-114.
15-31-1007. (Effective January 1, 2024) Tax credit for media production. (1) Subject to 15-31-1010 and through the tax year ending December 31, 2029, a production company and its affiliates are allowed a credit against the taxes imposed by chapter 30 and this chapter for investments in a state-certified production approved by the department of commerce as provided in 15-31-1004 and 15-31-1005. The credit is for the base investment made up to 6 months before state certification through completion of the project. The credit must be claimed for the period July 1, 2019, through December 31, 2020, in which the production expenditures were incurred or the compensation was paid unless the credit is transferred to the next tax year because the limits provided for in 15-31-1010 have been met. For periods after December 31, 2020, the credit must be claimed for the year in which the production expenditures were incurred or the compensation was paid unless the credit is transferred to the next tax year because the limits provided for in 15-31-1010 have been met.
(2) To claim the credit provided for in this section:
(a) the production company or its affiliate must have applied to the department of commerce as provided in 15-31-1005 and been approved to claim or transfer the credit; or
(b) the taxpayer must be the entity to which a credit approved pursuant to 15-31-1005 and this section was transferred.
(3) (a) The credit is equal to 20% of the production expenditures in the state in the tax year, plus the additional amounts provided for in subsection (3)(b), but may not in the aggregate exceed 35% of the production company's base investment in the tax year.
(b) Additional amounts for which the credit may be claimed are:
(i) 25% of the compensation paid per production or season of a television series to each crew member or production staff member who is a resident, not to exceed a $150,000 credit per person;
(ii) 15% of the compensation paid per production or season of a television series to each crew member or production staff member who is not a resident but for whom Montana income taxes have been withheld, not to exceed a $150,000 credit per person;
(iii) 20% of the first $7.5 million of compensation paid per production or season of a television series to each actor, director, producer, or writer for whom Montana income taxes have been withheld;
(iv) 30% of compensation paid per production or season of a television series to a student enrolled in a Montana college or university who works on the production for college credit. The credit may not exceed $50,000 per student. If a credit provided for in this subsection (3)(b)(iv) is claimed for an enrolled student, the credits provided for in subsections (3)(b)(i) through (3)(b)(iii) may not be claimed for the same enrolled student.
(v) an additional 10% of payments made to a Montana college or university for stage rentals, equipment rentals, or location fees for filming on campus;
(vi) an additional 10% of all in-studio facility and equipment rental expenditures incurred in this state for a production that rents a studio for 20 days or more;
(vii) an additional 5% for production expenditures made in an underserved area; and
(viii) an additional 5% of the base investment in the state if the state-certified production includes a Montana screen credit furnished by the state as provided in 15-31-1004(7).
(4) If one production company makes a production expenditure to hire another production company to produce a project or contribute elements of a project for pay, the hired production company is considered a service provider for the hiring company and the hiring company is entitled to claim the credit for all expenditures that are incurred in the state.
(5) Any unused credit may be carried forward for 5 years or may be transferred as provided in 15-31-1008. The credit allowed by this section, including a transferred credit, may not be refunded if the taxpayer has a tax liability less than the amount of the credit.
(6) A taxpayer claiming a credit shall include with the tax return the following information:
(a) the amount of tax credit claimed and transferred for the tax year;
(b) the amount of the tax credit previously claimed or transferred;
(c) the amount of the tax credit carried over from a previous tax year; and
(d) the amount of the tax credit to be carried over to a subsequent tax year.
(7) (a) A taxpayer claiming the credit provided for in this section must claim the credit as provided in subsection (7)(b).
(b) (i) An entity taxed as a corporation for Montana income tax purposes shall claim the credit on its corporate income tax return.
(ii) Individuals, estates, and trusts shall claim a credit allowed under this section on their individual income tax return.
(iii) An entity not taxed as a corporation shall claim the credit allowed under this section on member or partner returns as follows:
(A) corporate partners or members shall claim their share of the credit on their corporate income tax returns;
(B) individual partners or members shall claim their share of the credit on their individual income tax returns; and
(C) partners or members that are estates or trusts shall claim their share of the credit on their fiduciary income tax returns.
(c) In order to prevent disguised sales of the credit provided for in this section, allocations of credits through partnership and membership agreements may not be recognized unless they have a substantial economic effect as that term is defined in 26 U.S.C. 704 and applicable federal regulations.
(8) The credit allowed under this section may not be claimed by a taxpayer if the taxpayer has included the amount of the production expenditure or compensation on which the amount of the credit was computed in determining Montana taxable income under 15-30-2120 or as a deduction under 15-31-114.