§ 38QQ — Credit for taxpayers with an eligible theater production certificate; use; assignment, transfer or conveyance

[ Text of section added by 2024, 238, Sec. 212 effective November 20, 2024
until January 1, 2030 for taxable years beginning on or after January 1, 2025.
Repealed by 2024, 238, Sec. 315. See 2024, 238, Secs. 319 and 322.]Section 38QQ. (a) As used in this section, the following words shall, unless
the context clearly requires otherwise, have the following meanings:"Advertising and public relations expenditure", a cost incurred within the
commonwealth by an eligible theater production for goods or services related to
the marketing, public relations, creation and placement of print, electronic,
television, billboards or other forms of advertising to promote the eligible
theater production."Eligible theater production", a live stage musical, dance or theatrical production or tour being presented in a qualified production facility that is either: (i) a
pre-Broadway production; (ii) a pre-off-Broadway production; (iii) a national
tour launch; or (iv) a regional professional theater production."Eligible theater production certificate", a certificate issued by the office, in
consultation with the commissioner, certifying that a production is an eligible
theater production that meets the rules or regulations of the office and that it
has been awarded a tax credit in a specified amount, pursuant to section 3M of
chapter 23A."National tour launch", a live stage production that, in its original or adaptive
version, is performed in a qualified production facility and opens its national
tour in the commonwealth."Office", the Massachusetts office of business development established in
section 1 of chapter 23A, or any constituent office thereof."Payroll", all salaries, wages, fees and other compensation from sources
within the commonwealth, including, but not limited to, taxes, benefits and any
other consideration incurred or paid to talent and non-talent employees of the
applicant for services rendered within the commonwealth to and on behalf of an
eligible theater production; provided, that the payroll expenditure shall be
incurred or paid by the applicant for services related to any portion of an
eligible theater production from its pre-production stages, including, but not
limited to: (i) the writing of the script; (ii) casting; (iii) hiring of service
providers; (iv) purchases from vendors; (v) marketing; (vi) advertising; (vii)
public relations; (viii) load in; (ix) rehearsals; (x) performances; (xi) other
eligible theater production related activities; and (xii) load out; and provided
further, that the payroll expenditure shall be directly attributable to the eligible
theater production and shall be limited to the first $100,000 of wages incurred or
paid to each employee of an eligible theater production in each tax year."Pre-Broadway production", a live stage production that, in its original or
adaptive version, is performed in a qualified production facility having a
presentation scheduled for the city of New York's Broadway theater district
within 24 months after its presentation in the commonwealth."Pre-off-Broadway production", a live stage production that, in its original or
adaptive version, is performed in a qualified production facility having a
presentation scheduled for the city of New York's off-Broadway theater district
within 24 months after its presentation in the commonwealth."Production and performance expenditures", a contemporaneous exchange of
cash or cash equivalent for goods or services related to development, production,
performance or operating expenditures incurred in the commonwealth for a
qualified theater production, including, but not limited to, expenditures for
design, construction and operation, including sets, special and visual effects,
costumes, wardrobes, make-up, accessories, costs associated with sound, lighting,
staging, advertising and public relations expenditures, facility expenses,
rentals, per diems, accommodations and other related costs."Qualified production facility", a facility located in the commonwealth in which
live theater productions are, or are intended to be, exclusively presented that
contains at least 1 stage, a seating capacity of not less than 175 seats, dressing
rooms, storage areas and other ancillary amenities necessary for the eligible
theater production."Regional professional theater production", a live stage production that is
performed in a qualified production facility with a professional cast and crew."Transportation expenditures", expenses incurred in the commonwealth for
the packaging, crating and transportation both to the commonwealth for use in a qualified theater production of sets, costumes or other tangible property constructed
or manufactured outside the commonwealth, or from the commonwealth
after use in a qualified theater production of sets, costumes or other
tangible property constructed or manufactured in the commonwealth and the
transportation of the cast and crew to and from the commonwealth; provided,
that "transportation expenditures" shall include any portion performed in the
commonwealth of the packaging, crating and transporting of property and
equipment used for special and visual effects, sound, lighting and staging,
costumes, wardrobes, make-up and related accessories and materials and any
other performance or production-related property and equipment.(b) Any taxpayer that has been awarded an eligible theater production
certificate and has completed a cost accounting pursuant to subsection (c) of
section 3M of chapter 23A shall be allowed a tax credit against taxes imposed by
this chapter. The credit shall not exceed $7,000,000 and shall be equal to: (i) 35
per cent of the total in-state payroll costs; (ii) 25 per cent of the production and
performance expenditures; and (iii) 25 per cent of transportation expenditures.
Additionally, the credit shall not exceed the amount of credit specified in the
eligible theater production certificate.(c) The tax credit shall be allowed against the tax for the taxable period in
which the credit is issued and any amount of the tax credit that exceeds the tax
due for a taxable year may be carried forward for not more than 5 succeeding
tax years.(d) If a taxpayer has not claimed the tax credits, in whole or part, a taxpayer
eligible for the tax credits may assign, transfer or convey the tax credits, in
whole or in part, by sale or otherwise to any individual or entity, and such
assignee of the tax credits that have not claimed the tax credits, in whole or in
part, may assign, transfer or convey the tax credits, in whole or in part, by sale
or otherwise to any individual or entity. The assignee of the tax credits may
use acquired credits to offset up to 100 per cent of the tax liabilities otherwise
imposed pursuant to this chapter. The assignee may apply the tax credits
against taxes imposed on the assignee for not more than 5 succeeding tax years
from the date an eligible theater production certificate is first issued by the
office. The assignor shall perfect the transfer by notifying the commissioner, in
writing, within 30 calendar days following the effective date of the transfer and
shall provide any information as may be required by the commissioner to
administer and carry out this section.(e) Credits allowed to corporations that are included in a combined group
within the meaning of section 32B may be shared with other corporations within
such group that are also doing business in the commonwealth, to the extent
those corporations are engaged in a unitary business.(f) Credits allowed to a company that is an S corporation, as defined in
section 1361 of the Code, partnership or a limited liability company that is taxed
as a partnership shall be passed through respectively to persons designated as
partners, members or owners of such companies on a pro rata basis or pursuant
to an executed agreement among such persons designated as S corporation shareholders, partners or members documenting an alternate distribution method
without regard to their sharing of other tax or economic attributes of such
entity.(g) The commissioner shall promulgate such rules and regulations necessary
for the administration of this section.