§ 15-4-2007 - Application for rebate.
15-4-2007. Application for rebate.
(a) (1) To qualify for the rebates provided under this subchapter, a production company shall submit an application and provide an estimate of total expenditures to be made in Arkansas in connection with the production.
(2) The application and estimate of expenditures shall be filed with the Arkansas Economic Development Commission and be approved as eligible for the rebate provided by this subchapter before the commencement of production in Arkansas.
(b) (1) After each production company submits an application, the commission will sign a financial incentive agreement with each eligible production company that qualifies under this subchapter and is approved by the commission.
(2) (A) The financial incentive agreement shall define the benefits to be received and the start and end date of the project.
(B) The financial incentive agreement shall include the:
(i) Effective date of the agreement;
(ii) Term of the agreement, which shall be calculated from the date the agreement is signed by the production company and the Revenue Division of the Department of Finance and Administration;
(iii) Incentive for which the production company may qualify;
(iv) Investment threshold requirements necessary to qualify for eligibility;
(v) Production company's responsibilities for certifying eligibility requirements; and
(vi) Production company's responsibilities for failure to meet or maintain eligibility requirements.
(c) At the time the production company registers and provides the estimate of expenditures to the commission, the production company also shall designate a member or representative to work with the commission and the division on the reporting of expenditures and other information necessary to qualify for the rebate.
(d) No later than ninety (90) days after the last production expenses or costs are incurred in the production of a qualified production, the production company shall:
(1) Apply to the commission for a production rebate certificate; and
(2) Provide a final expenditure report that includes the amount of the company's production expenses or costs.
(e) (1) To be eligible for the rebate incentive provided for by this subchapter, payments for production and postproduction expenses shall be made from a checking account from an Arkansas financial institution.
(2) Direct cash payments by a production company to Arkansas vendors, businesses, or citizens hired as cast or crew that are accompanied by receipts shall be allowed if the sum of the cash payments does not exceed forty percent (40%) of the total verifiable expenditures.
(3) Per diem expenditures by the cast or crew for lodging when accompanied by receipts shall be eligible expenditures.
(f) Expenditure reports also shall include information as required by the division to ensure compliance with this subchapter.
(g) Payments for salaries or wages shall be eligible for the rebate if they are reported to the division and are subject to state income taxes.
(h) (1) The employment rebate also entitles a state-certified production for an additional rebate for employing full-time residents of Arkansas.
(2) The employment rebate authorizes an additional credit of ten percent (10%) for the aggregate payroll of salaries and wages to Arkansas residents who are below-the-line employees of the state-certified production.
(i) The salary for an employee whose salary is equal to or greater than five hundred thousand dollars ($500,000) shall be excluded from eligibility for either rebate.
(j) Payments for penalties or fines, payments to nonprofit organizations, and payments to federal and state entities that do not pay state taxes are not eligible.
(k) If a production company hires a payroll service company to handle the payroll of a production, the payroll payments shall be allowed as eligible expenditures provided:
(1) Payments made by the production company to the payroll service company are paid through an Arkansas financial institution account; and
(2) All eligible income payments to employees and independent contractors done through the payroll service are subject to Arkansas state income taxes.
(l) (1) The final expenditure report and all qualified production costs shall be subject to an audit by an outside certified public accountant licensed in the state.
(2) The eligible production company shall be responsible for paying all fees associated with the audit and final certification.
(m) (1) If the commission determines that the company is eligible for a rebate certificate, the commission shall enter on the certificate the amount of production expenses or costs that has been established to the satisfaction of the commission and the amount of the company's rebate.
(2) The commission shall provide a copy of the certificate to the Director of the Department of Finance and Administration.