§ 15-4-2003 — Definitions

As used in this subchapter: (1) "Application for a tax incentive" means the document required by the Film Office to begin the process for obtaining a tax incentive under this subchapter; (2) (A) "Below-the-line employees" means employees involved with the production of a motion picture production, including without limitation: (i) Casting assistants; (ii) Costume design; (iii) Gaffers; (iv) Grips; (v) Location managers; (vi) Production assistants; (vii) Set construction staff; and (viii) Set design staff. (B) "Below-the-line employees" does not include directors and producers; (3) (A) "Film and digital product" means video images or other visual media entertainment content. (B) "Film and digital product" includes without limitation: (i) Motion pictures; (ii) Documentaries; (iii) Long-form programs, specials, miniseries, series, music videos, and television programming; (iv) Interactive television; (v) Interactive games; (vi) Video games; (vii) Commercials; (viii) Digital media created primarily for distribution or exhibition to the general public; and (ix) A 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 qualified production through any means and media in a digital media format, film, or videotape if the program meets all the underlying criteria of a qualified production; (4) "Film Office" means the division of the Arkansas Economic Development Commission charged with the responsibility of promoting and assisting the digital content industry in Arkansas in order to enhance Arkansas as a land of opportunity for digital and motion picture filmmaking; (5) "Financial institution" means any bank or savings and loan association in the state that carries Federal Deposit Insurance Corporation insurance; (6) (A) "Highly compensated individual" means an individual who directly or indirectly receives compensation in excess of five hundred thousand dollars ($500,000) for personal services with respect to a single production. (B) An individual receives compensation indirectly when a production company pays a personal service company or an employee-leasing company that pays the individual; (7) (A) "Postproduction" means a final stage in the production of digital content occurring after the action has been filmed or videotaped and involves editing and the addition of soundtracks. (B) "Postproduction" includes without limitation editing, music, soundtracks, special effects, and credits; (8) "Postproduction costs" means all expenditures associated with the postproduction phase of a state-certified production within the state; (9) (A) "Production" means the process of producing a type of entertainment content and includes film and digital product. (B) "Production" shall not include: (i) An ongoing program created primarily as news, weather, or financial market reports; (ii) A production containing any material or performance that is obscene; (iii) A production deemed an infomercial; or (iv) Sexually explicit productions as defined in 18 U.S.C. § 2257 , as it existed on January 1, 2009; (10) "Production company" means a corporation, partnership, limited liability company, or other business entity engaged in the business of producing qualified productions and qualified by the Secretary of State to engage in business in the state; (11) (A) "Qualified production costs" means costs associated with the development, preproduction, production, or postproduction of a qualified production within the state. (B) "Qualified production costs" includes costs associated with original music compositions produced by an Arkansas resident to be used as incidental music, the score, or the soundtrack in film or video games. (C) "Qualified production costs" includes the cost to option or purchase intellectual property, including without limitation books, scripts, music, or trademarks relating to the development or purchase of a script, screenplay, or format if: (i) The intellectual property was produced primarily in Arkansas or the creator of the intellectual property is a resident of Arkansas; (ii) At least seventy-five percent (75%) of the subsequent film or digital content is produced in Arkansas; and (iii) The production expenses or costs for the optioning or purchase are less than twenty-five percent (25%) of the production expenses or costs incurred in Arkansas. The expenses or costs include all expenditures associated with the optioning or purchase of intellectual property, including option money, agent fees, and attorney's fees relating to the transaction but do not include deferrals, deferments, royalties, profit participation, or recourse or nonrecourse loans that the eligible production company may negotiate in order to obtain the rights to the intellectual property. (D) "Qualified production costs" does not include: (i) The optioning or purchase of intellectual property that does not comply with the provisions of subdivision (9)(A) of this section; (ii) Media buys, promotional events, or gifts or public relations associated with the promotion or marketing of any qualified production; (iii) Deferred, leveraged, or profit participation costs relating to any and all personnel associated with any and all aspects of the production, including without limitation producer fees, director fees, talent fees, and writer fees; and (iv) Amounts paid to persons or businesses as a result of their participation in profits from the exploitation of the qualified production; (12) "Resident" means natural persons and includes, for the purpose of determining eligibility for the tax credits provided by this subchapter, a person domiciled in Arkansas and any other person who maintains a permanent residence within the state and spends in the aggregate at least six (6) months of the taxable year within the state; (13) "State-certified production" means a qualified production produced by an eligible production company that is: (A) In compliance with rules promulgated under this subchapter; (B) Authorized by the Film Office to conduct business in this state; and (C) Approved by the Director of the Arkansas Economic Development Commission as qualifying for a discretionary production tax incentive under this subchapter; (14) "Tax incentive" means a rebate under § 15-4-2008 or a tax credit under § 15-4-2012 ; (15) "Veteran" means an individual who: (A) Was honorably discharged from a tour of active duty, other than active duty for training only, with the United States Armed Forces; or (B) Has served honorably in the National Guard or reserve forces of the United States Armed Forces for at least six (6) years, regardless of whether the individual has been discharged; and (16) "Veteran-owned small business" means a business: (A) With profits of less than one million dollars ($1,000,000); (B) In which at least one (1) veteran owns more than fifty percent (50%) of the business; and (C) That has its principal place of business or its headquarters in Arkansas.

Legislative History

Amended by Act 2023, No. 204,§ 1, eff. 8/1/2023. Amended by Act 2021, No. 797,§ 1, eff. 7/28/2021. Amended by Act 2021, No. 474,§ 1, eff. 7/28/2021. Amended by Act 2019, No. 367,§ 1, eff. 7/24/2019. Amended by Act 2013, No. 496,§ 6, eff. 8/16/2013. Amended by Act 2013, No. 496,§ 5, eff. 8/16/2013. Amended by Act 2013, No. 496,§ 4, eff. 8/16/2013. Amended by Act 2013, No. 496,§ 3, eff. 8/16/2013. Amended by Act 2013, No. 496,§ 2, eff. 8/16/2013. Amended by Act 2013, No. 496,§ 1, eff. 8/16/2013. Acts 1997, No. 919, § 3; 2009, No. 816, § 1.