A BILL TO BE ENTITLED
AN ACT to conform the tax credit for production companies to the standard tax treatment with Respect to the deduction of business expenses and to make technical changes to that credit.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑130.5(a)(18) is repealed.
SECTION 2.  G.S. 105‑130.47(a) reads as rewritten:
"(a)	Definitions. – The following definitions apply in this section:
(1)	Highly compensated individual. – An individual who receives compensation in excess of one million dollars ($1,000,000) for services with respect to a single production.
(2)	Live sporting event. – A scheduled sporting competition, game, or race that is not originated by a production company, but originated solely by an amateur, collegiate, or professional organization, institution, or association for live or tape‑delayed television or satellite broadcast. A live sporting event shall not include commercial advertising, an episodic television series, a television pilot, music video, motion picture, or documentary production where any sporting events are presented through archived historical footage or similar footage depicting earlier live sporting events that originated more than thirty days before the time of such usage.
(3)	Production company. – Defined in G.S. 105‑164.3.
(4)	Qualifying expenses. – The sum of the total amount spent in this State for the following by a production company in connection with a production:
a.	Goods and services leased or purchased. For goods with a purchase price of twenty‑five thousand dollars ($25,000) or more, the amount included in qualifying expenses is the purchase price less the fair market value of the good at the time the production is completed.
b.	Compensation and wages, other than amounts paid to a highly compensated individual, on which withholding payments are remitted to the Department of Revenue under Article 4A of this Chapter."
SECTION 3.  G.S. 105‑130.47(i) is repealed.
SECTION 4.  G.S. 105‑134.6(c)(9) is repealed.
SECTION 5.  G.S. 105‑151.29(a) reads as rewritten:
"(a)	Definitions. – The following definitions apply in this section:
(1)	Highly compensated individual. – An individual who receives compensation in excess of one million dollars ($1,000,000) for services with respect to a single production.
(2)	Live sporting event. – A scheduled sporting competition, game, or race that is not originated by a production company, but originated solely by an amateur, collegiate, or professional organization, institution, or association for live or tape‑delayed television or satellite broadcast. A live sporting event shall not include commercial advertising, an episodic television series, a television pilot, music video, motion picture, or documentary production where any sporting events are presented through archived historical footage or similar footage depicting earlier live sporting events that originated more than thirty days before the time of such usage.
(3)	Production company. – Defined in G.S. 105‑164.3.
(4)	Qualifying expenses. – The sum of the total amount spent in this State for the following by a production company in connection with a production:
a.	Goods and services leased or purchased. For goods with a purchase price of twenty‑five thousand dollars ($25,000) or more, the amount included in qualifying expenses is the purchase price less the fair market value of the good at the time the production is completed.
b.	Compensation and wages, other than amounts paid to a highly compensated individual, on which withholding payments are remitted to the Department of Revenue under Article 4A of this Chapter."
SECTION 6.  G.S. 105‑151.29(i) is repealed.
SECTION 7.  G.S. 105‑259(b) reads as rewritten:
"(b)	Disclosure Prohibited. – An officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person unless the disclosure is made for one of the following purposes:
…
(36)	To furnish to a taxpayer claiming a credit under G.S. 105‑130.47 or G.S. 105‑151.29 information used by the Secretary to adjust the amount of the credit claimed by the taxpayer."
SECTION 8.  Section 7 of this act is effective when it becomes law.  The remainder of this act is effective for taxable years beginning on or after January 1, 2006.