As used in this
section and sections 24-48.5-115 and 24-48.5-116, unless the context otherwise
requires:
(1) (a) Film means any visual or audiovisual work, including, without
limitation, a video game, television show, or a television commercial, that contains a
series of related images, regardless of the medium by which the work is fixed and
from which it can be viewed or reproduced, and that is primarily intended to be
either:
(I) Commercially exploited by being shown in theaters or on television
licensed for the home or international market, or otherwise; or
(II) For internal industrial, corporate, or institutional use.
(b) Film does not include an obscene film.
(2) Obscene has the same meaning as set forth in section 18-7-101 (2),
C.R.S.
(3) Office means the Colorado office of film, television, and media created
pursuant to section 24-48.5-115.
(4) Originates means the production company has been a resident of the
state or registered with the secretary of state for at least twelve consecutive
months and, as of the date of applying for a performance-based incentive as
specified in section 24-48.5-116, has engaged in production activities in the state
for other projects in the past twelve consecutive months; except that, if the
production company creates a business entity for the sole purpose of conducting
production activities in the state, then such business entity need not be registered
with the secretary of state for twelve consecutive months, but the manager of the
business entity must be a resident of the state for at least twelve consecutive
months as of the date of applying for a performance-based incentive as specified in
section 24-48.5-115. For purposes of this subsection (4), manager of the business
entity means a manager with decision-making authority to make financial or legal
commitments on behalf of the production or business.
(4.5) (a) Personal service corporation has the same meaning as set forth in
section 269A (b)(1) of the internal revenue code.
(b) Employee-owner of a personal service corporation has the same
meaning as employee owner as set forth in section 269A (b)(2) of the internal
revenue code.
(5) Production activities means the shooting of a film, support activities
related to such shooting, and any preshooting or postshooting activities that
commence on or after July 1, 2009, and that are necessary to produce a finished
film, including but not limited to editing and the creation of sets, props, costumes,
and special effects.
(6) Production company means a person, including a corporation or other
business entity, that engages in production activities for the purpose of producing
all or any portion of a film in Colorado.
(7) Qualified local expenditure means a payment made by a production
company operating in Colorado to a person or business in Colorado in connection
with production activities in Colorado. Qualified local expenditure includes, but is
not limited to:
(a) Payments made in connection with developing or purchasing the story
and scenario to be used for a film;
(b) Payments made for the costs of set construction and operations,
wardrobe, accessories, and related services;
(c) Payments made for the costs of photography, sound recording and
synchronization, lighting, and related services;
(d) Payments made for the costs of editing, post-production, music, and
related services;
(e) Payments made for the costs of renting facilities and equipment,
including location fees, leasing vehicles, and providing food and lodging to people
working on the film production;
(f) Payments for airfare purchased through a Colorado-based travel agency
or company;
(g) Payments for insurance and bonding purchased through a Colorado-based insurance agent;
(h) Payments for other direct costs incurred by the film production company
that are deemed appropriate by the office;
(i) Payments of up to one million dollars per employee or contractor, made by
a production company to pay the wages or salaries of employees or contractors
who participate in the production activities. In order for any wage or salary to be
considered a qualified local expenditure, all Colorado income taxes shall be
withheld and paid either by the production company or the individual. Any payments
in excess of one million dollars per employee or contractor shall be excluded; and
(j) Payments of up to one million dollars per calendar year per personal
service corporation, made by a production company to a personal service
corporation to pay the wages or salaries of an employee-owner of the personal
service corporation who participates in the production activities. In order for any
wage or salary to be a considered a qualified local expenditure, the production
company must file an information return pursuant to section 39-22-604 (21)
regarding the payments made to the personal service corporation. Any payments in
excess of one million dollars per personal service corporation shall be excluded.