il-v50i42-14-ill-adm-code-532: 14 Ill. Adm. Code 532 — Illinois Live Theater Production Tax Credit Program

1) Heading of the Part: Illinois Live Theater Production Tax Credit Program 2) Code Citation: 14 Ill. Adm. Code 532 3) Section Numbers: Proposed Actions: 532.30 Amendment 532.40 Amendment 532.70 Amendment 532.90 Amendment 4) Statutory Authority: Implementing and authorized by the Live Theater Production Tax Credit Act [35 ILCS 17]. 5) A Complete Description of the Subjects and Issues Involved: The proposed amendment incorporates statutory changes to the Live Theater Production Tax Credit Act [35 ILCS 17]. The amendment allows for the reallocation of unused credits from long-run and pre- Broadway productions to be awarded to Commercial Broadway Touring shows in that fiscal year. The amendment also clarifies that if a complete independent accountant's report is not received within 60 days the applicant loses its place in the queue, and provides an extension to 180 days before the Department will not accept the claim and the applicant forfeits the theater tax credit award for that production. 6) Published studies or reports, and sources of underlying data, used to compose this rulemaking: None 7) Will this proposed rulemaking replace an emergency rule currently in effect? No 8) Does this rulemaking contain an automatic repeal date? No 9) Do these proposed amendments contain incorporations by reference? No 10) Are there any other proposed rulemakings pending on this Part? No 11) Statement of Statewide Policy Objectives: This rulemaking will not require a local government to establish, expand, or modify its activities in such a way as to necessitate additional expenditures from local revenues. 12) Time, Place, and Manner in which interested persons may comment on this proposed rulemaking: A 45-day written comment period will begin on the day the Notice of Proposed Amendments appears in the Illinois Register. Please mail written comments on the proposed rulemaking to the attention of: Gina Arterberry Department of Commerce & Economic Opportunity nd 1011 S. 2 St. Springfield, IL 62704-3004 (217) 524-8974 Gina.M.Arterberry@Illinois.gov 13) Initial Regulatory Flexibility Analysis: A) Description of the type of small business, not for profit corporations or small municipalities subject to the proposed amendment: None B) Description of the proposed reporting, bookkeeping and other procedures required for compliance with the amendment: None C) Description of the types of professional skills necessary for compliance: None 14) Small Business Economic Impact Analysis: Determine whether the rulemaking has an adverse impact on small business (fewer than 50 full-time employees or less than $4,000,000 in gross annual sales). An adverse impact is one that can be reasonably foreseen on small businesses including, but not limited to, a loss of customers, loss of revenue, or increased business expenses. If the proposed amendment has an adverse impact on small business, the agency must provide an economic impact analysis including: A) Types of businesses subject to the proposed amendments: 71 Arts, Entertainment, and Recreation B) Estimated number of small business subject to the proposed amendments: N/A C) Categories that the agency reasonably believes the rulemaking will impact, including: viii. record keeping DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY NOTICE OF PROPOSED AMENDMENTS D) Projected reporting, recordkeeping and other administrative costs for compliance with the proposed amendments: None E) Type of professional skills necessary for preparation of any report or record required for compliance with the proposed amendments: None F) Statement of the probable positive or negative economic effect on small business: None G) Description of any less intrusive or costly alternative methods of achieving the purposes of the amendments: None 15) Regulatory Agenda on which this rulemaking was summarized: This rule was not included on either of the 2 most recent agendas because the Department did not anticipate the change. 16) Any other information or justification for the proposed amendment that the agency believes would be helpful to the public regarding the proposed amendment. For example, a discussion or analysis of the benefits of the proposed amendment is projected to have on the Illinois public, consumers, investors or other similar groups: N/A The full text of the Proposed Amendments begins on the next page: DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY NOTICE OF PROPOSED AMENDMENTS TITLE 14: COMMERCE SUBTITLE C: ECONOMIC DEVELOPMENT CHAPTER I: DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY PART 532 ILLINOIS LIVE THEATER PRODUCTION TAX CREDIT PROGRAM Section 532.10 Purpose 532.20 Definitions 532.30 Live Theater Tax Credit Directives 532.40 Live Theater Tax Credit Amount 532.50 Application for Accredited Theater Production Certificate 532.60 Approval/Denial of Accredited Theater Production Certificate 532.70 Request for Theater Tax Credit Award 532.80 Approval/Denial of Theater Tax Credit Award 532.90 Calculation of Theater Tax Credit Award 532.100 Live Theater Tax Credit Program Evaluation and Report to Illinois General Assembly 532.110 Transfer of Theater Tax Credit Award 532.120 Confidentiality of Documents and Record Retention Requirements AUTHORITY: Implementing and authorized by the Live Theater Production Tax Credit Act [35 ILCS 17]. SOURCE: Adopted at 37 Ill. Reg. 12028, effective July 12, 2013; amended at 49 Ill. Reg. 15946, effective December 4, 2025; amended at 50 Ill. Reg. ______, effective ____________. Section 532.30 Live Theater Tax Credit Directives a) For taxable years beginning on and after January 1, 2012, subject to the limitations and requirements provided in the Act, an applicant is entitled to a theater tax credit award as approved by the Department for qualifying Illinois labor expenditures and Illinois production spending for each tax year in which the applicant is awarded an accredited theater production certificate issued by the Department. The amount of tax credits awarded pursuant to this Act shall not exceed $2,000,000 in any State fiscal year ending on or before June 30, 2022. The amount of tax credits awarded pursuant to this Act for the State fiscal year ending on June 30, 2023 or the State fiscal year ending on June 30, 2024 shall not exceed DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY NOTICE OF PROPOSED AMENDMENTS $4,000,000. For the State fiscal year ending on June 30, 2023 and the State fiscal year ending on June 30, 2024, no more than $2,000,000 in credits may be awarded in either of those fiscal years to accredited theater productions that are not commercial Broadway touring shows, and no more than $2,000,000 in credits may be awarded in either of those fiscal years to commercial Broadway touring shows. For State fiscal years ending on or after June 30, 2025, the amount of tax credits awarded under this Act shall not exceed $6,000,000, with no more than $2,000,000 in credits awarded for long-run productions and pre-Broadway productions, no more than $2,000,000 in credits awarded for commercial Broadway touring shows, and no more than $2,000,000 in credits awarded for non-profit theater productions. If, in any State fiscal year, less than $2,000,000 in credits under this Act are awarded for long-run productions and pre-Broadway productions, then the difference between $2,000,000 and the amount of the credits awarded for long-run productions and pre-Broadway productions in that fiscal year may be added to the $2,000,000 in credits allowed to be awarded for commercial Broadway touring shows in that State fiscal year. [35 ILCS 17/10-20] b) The $2,000,000 in credits that may be awarded for non-profit theater productions under this Act in a State fiscal year shall be allocated as follows: 1) no credits may be awarded for non-profit theater productions that have an annual operating budget of less than $25,000; 2) no more than $225,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $25,000 or more but less than $250,000; 3) no more than $225,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $250,000 or more but less than $1,000,000; 4) no more than $250,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $1,000,000 or more but less than $2,500,000; 5) no more than $300,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $2,500,000 or more but less than $5,000,000; 6) no more than $300,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $5,000,000 or more but less than $10,000,000; and 7) no more than $700,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $10,000,000 or more. [35 ILCS 17/10-20]. c) In accordance with the purpose of the Act, credits shall be awarded on a first- come, first-served basis as described in Section 532.40(c). [35 ILCS 17/10-20] d) To accomplish the purposes of the Act, the Department may use the training programs provided under Section 605-800 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois [20 ILCS 605]. [35 ILCS 17/10-35] (Source: Amended at 50 Ill. Reg. ______, effective ____________) Section 532.40 Live Theater Tax Credit Amount a) The maximum monetary amount of tax credits awarded pursuant to the Act shall not exceed the actual amount as directed in the Act in any State fiscal year. [35 ILCS 17/10-20] b) Each theater tax credit award shall be limited to $500,000 per accredited theater production per tax year in an effort to provide overall support to the live theater industry in Illinois. c) If applications for theater tax credits exceed the maximum monetary cap amount, for credits established by the Act, credits shall be awarded on a first-come, first- served basis, based on the date on which each properly completed application for an accredited theater production certificate is received by the Department. If more than one application for an accredited theater production certificate is received on the same day, the credits will be awarded based on the time of submission on that particular day. d) If the amount of credits applied for in any fiscal year exceeds the amount authorized to be awarded underIf the amount of credits applied for in any fiscal year exceeds the amount authorized to be awarded under Section 10-20 of the Act, the excess credit amount shall be awarded in the next fiscal year in which credits remain available for award and shall be treated as having been applied for on the first day of that fiscal yearthe excess credit amount shall be awarded in the next fiscal year in which credits remain available for award and shall be treated as having been applied for on the first day of that fiscal year. [35 ILCS 17/10-20] (Source: Amended at 50 Ill. Reg. ______, effective ____________) Section 532.70 Request for Theater Tax Credit Award a) After an applicant has received an accredited theater production certificate, it can request a theater tax credit award from the Department. In accordance with the Act, the theater tax credit award shall only be awarded to an applicant if: 1) The total amount of theater tax credit awards awarded pursuant to the Act has not exceeded the annual fiscal maximum monetary cap amount. 2) The applicant successfully demonstrates to the Department that it complied with its diversity plan or that it made good-faith efforts to comply with its diversity plan. 3) The applicant successfully demonstrates to the Department that it fulfilled its training plan or that it made good-faith efforts to comply with its training plan. b) An applicant with an accredited theater production certificate shall provide the following with its request for a theater tax credit award: 1) An itemized statement of the Illinois labor expenditures or Illinois production spending for which the credit is claimed and of Illinois labor expenditures generated by the employment of residents of geographic areas of high poverty or high unemployment for which additional credit is claimed; 2) Copies of the books and records of the applicant for the accredited theater production, showing the Illinois labor expenditures or Illinois production spending for which the credit is claimed, and all documentation necessary to support its computation; and 3) Independent Accountant's Report A) An independent accountant's report, prepared by a licensed certified public accountant, in the form prescribed by the Department, that is supported by the copies of the books, records and other documents of the applicant that are attached to the request. The licensed certified public accountant must attest that he or she has examined the books, records and other documents according to procedures agreed upon by the Department. The attestation and examination must be performed by a licensed certified public accountant: i) under the professional standards established by the American Institute of Certified Public Accountants, specifically the Statements on Standards of Attestation Engagements at AT Sec. 101 (Attest Engagements) and AT Sec. 201 (Agreed-Upon Procedures Engagements); and ii) whose engagement to provide the attestation was approved by the Department before work on the engagement is commenced. B) If the Department does not receive a completeAn independent accountant's report must be submitted to the Department within 60 calendar days after the end of the Illinois production run. If the independent accountant's report is not received by the Department, the applicant will forfeit its place in the queue and after 180 calendar days after the end of the Illinois production run, the Department will not accept the claim and the applicant will forfeit the theater tax credit award for that production. c) A request for a theater tax credit award must be made to the Department by March 1in order to claim a theater tax credit for expenditures in the prior tax year. (Source: Amended at 50 Ill. Reg. ______, effective ____________) Section 532.90 Calculation of Theater Tax Credit Award DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY NOTICE OF PROPOSED AMENDMENTS a) The theater tax credit award shall be calculated each tax year based upon the filing by the applicant on forms prescribed by the Department containing information regarding qualifying and quantified Illinois labor expenditures, as defined in Section 10-10 of the Act, net of the limitation in that Section, and Illinois production spending, as defined in Section 10-10, net of the limitation in that Section. From the amount calculated, the applicant shall be entitled to receive a tax credit award of up to: 1) 20% of the Illinois labor expenditures for each tax year; plus 2) 20% of the Illinois production spending for each tax year; plus 3) 15% of the Illinois labor expenditures generated by the employment of Illinois residents in geographic areas of high poverty or high unemployment in each tax year, as determined by the Department. [35 ILCS 17/10-45] b) The theater tax credit award shall not exceed $500,000 for any accredited theater production. c) If an accredited theater production receives only a portion of the theater tax credit award to which the Department has determined it is entitled due to the annual fiscal cap on the amount of credits that can be awarded, the accredited theater production shall be eligible to receive the remainder of its credits in the next tax year. If an accredited theater production does not receive any theater tax credit award due to the annual fiscal cap on the amount of credits that can be awarded, the accredited theater production shall not be entitled to any theater tax credit award in the following tax years. d) The theater tax credit award shall state the amount of the tax credit award to which the applicant is entitled for that tax year and the Department shall contemporaneously notify the applicant and Illinois Department of Revenue in accordance with Section 222 of the Illinois Income Tax Act [35 ILCS 5/222] or, if the applicant is a non-profit theater production, subsection (k) of Section 704A of the Illinois Income Tax Act, as applicable. (Source: P.A. 97-636, eff. 6-1-12.). [35 ILCS 17/10-40] (Source: Amended at 50 Ill. Reg. ______, effective ____________) DEPARTMENT OF HUMAN SERVICES NOTICE OF PROPOSED AMENDMENTS