W. Va. Code R. § 110-13X-2

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-13X-2 - Definitions

2.1. "Commercial" (not a "qualified project") means television advertising, movie theater advertising, or computer advertising produced and paid for by a promoter, underwriter or sponsor, for the purpose of promoting, or marketing a product or service, including public service programming.

2.2. "Commercial exploitation" means reasonable intent for public viewing for the delivery medium used.

2.3. "Controlled group" means one or more chains of corporations connected through stock ownership with a common parent corporation, if stock possessing at least fifty percent of the voting power of all classes of stock of each of the corporations is owned directly or indirectly by one or more of the corporations; and the common parent owns directly stock possessing at least fifty percent of the voting power of all classes of stock at least of the other corporations.

2.4. "Direct production expenditure" means a transaction that occurs in the state of West Virginia or with a West Virginia vendor, and includes:

2.4.1. Payment of wages, fees and costs for related fringe benefits provided for talent, management or labor that are subject to West Virginia income tax;

2.4.2. Payment to a personal services corporation for the services of a performing artist if:

2.4.2.a. The personal services corporation is subject to West Virginia income tax on those payments; and

2.4.2.b. The performing artist receiving the payments from the personal services corporation is subject to West Virginia income tax; and

2.4.3. Any of the following provided by a West Virginia vendor:

2.4.3.a. The story and scenario (script) to be used by a qualified project;

2.4.3.b. Set construction and operations, wardrobe, accessories and related services;

2.4.3.c. Photography, sound synchronization, lighting and related services;

2.4.3.d. Editing and related services;

2.4.3.e. Rental of facilities and equipment;

2.4.3.f. Leasing of vehicles;

2.4.3.g. Food or lodging;

2.4.3.h. Airfare if purchased through a West Virginia-based travel agency or travel company;

2.4.3.i. Insurance coverage and bonding if purchased through a West Virginia-based insurance agent; and

2.4.3.j. Other direct costs of producing a qualified project in accordance with generally accepted entertainment industry practices. "Direct production expenditure" shall not include depreciation of any item that has less than one full year of depreciable life, either a full year original depreciable life or a full year remaining depreciable life out of a partially depreciated asset, as determined for federal income tax purposes.

2.5. "Eligible company" means a person or business entity engaged in the business of producing film industry productions. The term excludes state agencies.

2.6. "Feature length" means in excess of forty minutes.

2.7. "Film industry production" means a qualified project intended for reasonable national or international commercial exploitation.

2.8. "Investor" means and includes any person or entity seeking to establish entitlement to the tax credit addressed in this rule, or any person or entity making expenditures, investments or purchases for which the purchaser, investor or taxpayer purports to directly or indirectly establish entitlement to the tax credit established in this rule.

2.9. "Loan-out corporation" means a company owned by one or more artists that provide the services of a performing artist to a payroll service company or a third-party production company, i.e., an eligible company for purposes of W. Va. Code § 11-13X-1, et seq.

2.10. "Multi-state distribution" means reaching at least one other state besides West Virginia.

2.11. "Payroll service company" means a business engaged in outsourcing solutions for human resources, payroll, tax and benefits administration.

2.12. "Performing artist" means a person hired to perform services associated with the artist's particular craft in any department associated with a qualified project.

2.13. "Personal services corporation" means a company that performs services in the field of performing arts, among other fields, and meets ownership and service tests as determined by the Internal Revenue Service.

2.14. "Post-production expenditure" means a transaction that occurs in West Virginia or with a West Virginia vendor after the completion of principal photography, including editing and negative cutting, Foley recording and sound effects, automatic dialogue replacement (also known as ADR or dubbing), special effects or visual effects, including computer-generated imagery or other effects, scoring and music editing, sound editing, beginning and end credits, soundtrack production, subtitling or addition of sound or visual effects; but not including expenditure for advertising, marketing, distribution or expense payments.

2.15. "Purchaser" means and includes any person or entity seeking to establish entitlement to the tax credit addressed in this rule, or any person or entity making expenditures, investments or purchases for which the purchaser, investor or taxpayer purports to directly or indirectly establish entitlement to the tax credit established in this rule.

2.16. "Qualified project" means a feature length theatrical or direct-to-video motion picture, a made-for-television motion picture, a music video, commercial still photography, a television pilot program, a television series and a television mini-series that incurs a cumulative amount of $50,000 in a calendar year in direct production expenditures and post-production expenditures, as defined by this subsection, in West Virginia or any combination of projects not previously claimed that would qualify for the credit except for cost, and that combined meets or exceeds the cumulative amount of $50,000 in a calendar year. The term excludes news or current affairs programming, a weather or market program, a talk show, a sporting event or show, an awards show, a gala, a production that solicits funds, a home shopping program, a program that primarily markets a product or service, political advertising or a concert production.

2.16.1. A qualified project may be produced on any single media or multimedia program that:

2.16.1.a. Is fixed on film, digital medium, videotape, computer disk, laser disc or other similar delivery medium;

2.16.1.b. Can be viewed or reproduced;

2.16.1.c. Is not intended to and does not violate a provision of W. Va. Code § 61-8C-1, et seq.;

2.16.1.d. Does not contain obscene matter or sexually explicit conduct, as defined by W. Va. Code § 61-8A-1, et seq.;

2.16.1.e. Is intended for reasonable commercial exploitation for the delivery medium used whether delivery is in-state or multi-state distribution; and

2.16.1.f. Does not contain content that negatively portrays the State of West Virginia, as determined in the sole discretion of the Department of Economic Development.

2.17. "Related person" means a corporation, partnership, association or trust controlled by the taxpayer; or an individual, corporation, partnership, association or trust that is in control of the taxpayer.

2.18. "Tax Commissioner" means the West Virginia State Tax Commissioner or his or her designee.

2.19. "Taxpayer" means and includes any person or entity seeking to establish entitlement to the tax credit addressed in this rule, or any person or entity making expenditures, investments or purchases for which the purchaser, investor or taxpayer purports to directly or indirectly establish entitlement to the tax credit established in this rule.

2.20. "Television series" means a group of programs created or adapted for television broadcast with a common series title, usually related to one another in subject.

W. Va. Code R. § 110-13X-2