A Bill for an Act
Page 1, Line 101Concerning the creation of tax incentives to support the
Page 1, Line 102film festival industry.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill creates a new refundable tax credit only if at least one qualified film festival with a multi-decade operating history and a verifiable track record of attracting 100,000 or more in-person ticket sales and over 10,000 out-of-state and international attendees (global film festival) commences the relocation of the festival to Colorado by January 1, 2026. Upon relocation, for calendar years commencing on or after January 1, 2027, but before January 1, 2037, the maximum aggregate amount of refundable tax credits that any qualified global film festival entity is eligible to receive is $34 million and the maximum aggregate amount that all existing or small Colorado festival entities collectively may receive is $5 million.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, add 39-22-571 as
Page 2, Line 3follows:
Page 2, Line 439-22-571. Film festival incentive tax credit - tax preference
Page 2, Line 5performance statement - legislative declaration - definitions - repeal.
Page 2, Line 6(1) (a) The general assembly finds and declares that:
Page 2, Line 7(I) Colorado's film festival industry has the ability to be
Page 2, Line 8a true economic driver in the state; and
Page 2, Line 9(II) By providing a tax incentive to big film festivals to
Page 2, Line 10relocate to Colorado, a single big festival could bring over
Page 2, Line 11twenty thousand out of state visitors, leading to a boost in
Page 2, Line 12local economies, an increase in sales and use tax revenue, and
Page 2, Line 13job creation.
Page 2, Line 14(b) In accordance with section 39-21-304 (1), which
Page 2, Line 15requires each bill that creates a new tax expenditure to include
Page 2, Line 16a tax preference performance statement as part of a statutory
Page 2, Line 17legislative declaration, the general assembly finds and
Page 2, Line 18declares that the purpose of the tax credits provided for in this
Page 2, Line 19section is to induce designated behavior by taxpayers and to
Page 2, Line 20provide a reduction in income tax liability for certain businesses
Page 2, Line 21or individuals by allowing film festival organizers to receive a
Page 2, Line 22credit against income tax or an income tax refund for qualified
Page 2, Line 23expenditures if certain criteria are met. Specifically, these tax
Page 3, Line 1expenditures are intended to incentize film festival organizers
Page 3, Line 2to relocate to Colorado and, in particular, for big film
Page 3, Line 3festivals to boost local economies, increase sales and use tax
Page 3, Line 4revenue, and create new jobs.
Page 3, Line 5(c) The general assembly and the state auditor shall
Page 3, Line 6measure the effectiveness of the tax credit in achieving the
Page 3, Line 7purposes specified in subsection (1)(b) of this section based on the
Page 3, Line 8amount of qualified expenditures made in Colorado, the number
Page 3, Line 9of visitors attending film festivals in the state, and the amount
Page 3, Line 10of state and local sales and use tax collected that can be
Page 3, Line 11attributed to such film festivals.
Page 3, Line 12(2) As used in this section, unless the context otherwise
Page 3, Line 13requires:
Page 3, Line 14(a) "Global film festival entity" means a film festival
Page 3, Line 15entity that is either a tax-exempt entity under 26 U.S.C. sec. 501
Page 3, Line 16(c)(3) of the federal "Internal Revenue Code of 1986" or a
Page 3, Line 17for-profit entity with a multi-decade operating history and a
Page 3, Line 18verifiable annual track record of attracting one hundred
Page 3, Line 19thousand or more in-person ticket sales and tens of thousands
Page 3, Line 20of out-of-state and international attendees.
Page 3, Line 21(b) "Existing or small Colorado film festival entity"
Page 3, Line 22means a film festival entity that is not a global film festival
Page 3, Line 23entity. A film festival may be an entity that provides video,
Page 3, Line 24television, new media, or content creation exhibition.
Page 3, Line 25(c) "Office" means the Colorado office of economic
Page 3, Line 26development created in section 24-48.5-101 (1).
Page 3, Line 27(d) "Qualified expenditure" means a payment made by a
Page 4, Line 1global film festival entity or an existing Colorado or small
Page 4, Line 2film festival entity operating in Colorado in connection with
Page 4, Line 3the film festival taking place in Colorado. Qualified
Page 4, Line 4expenditures for an existing or small Colorado film festival are
Page 4, Line 5limited to those incurred in Colorado in accordance with
Page 4, Line 6policies and procedures determined by the office. "Qualified
Page 4, Line 7expenditure" includes, but is not limited to:
Page 4, Line 8(I) Salaries and benefits of employees of the entity that
Page 4, Line 9operates the festival;
Page 4, Line 10(II) Costs associated with contractors that facilitate the
Page 4, Line 11operation of the festival;
Page 4, Line 12(III) Costs associated with the rental of films, equipment,
Page 4, Line 13storage, venues, and office or other space to operate the
Page 4, Line 14festival;
Page 4, Line 15(IV) Costs associated with rental expenses or building
Page 4, Line 16operation expenses of the entity that operates the festival;
Page 4, Line 17(V) Travel expenses for individuals associated with the
Page 4, Line 18entity that operates the festival, including travel expenses for
Page 4, Line 19contractors and talent;
Page 4, Line 20(VI) Any other costs incurred by the entity associated
Page 4, Line 21with insurance, tickets, marketing, and other related film
Page 4, Line 22programming events;
Page 4, Line 23(VII) Capital costs to operate the film festival in
Page 4, Line 24Colorado; and
Page 4, Line 25(VIII) Depreciable investments in real or business
Page 4, Line 26personal property in Colorado that are needed to operate the
Page 4, Line 27film festival.
Page 5, Line 1(3) (a) Subject to subsection (3)(f) of this section, for the
Page 5, Line 2calendar years commencing on or after January 1, 2027, but
Page 5, Line 3before January 1, 2029, there is allowed a tax credit reservation
Page 5, Line 4with respect to income taxes imposed pursuant to this article 22
Page 5, Line 5to any global film festival entity in an amount equal to the
Page 5, Line 6amount of qualified expenditures with an aggregate limit of
Page 5, Line 7four million dollars for each respective calendar year.
Page 5, Line 8(b) Subject to subsection (3)(f) of this section, for the
Page 5, Line 9calendar year commencing on January 1, 2029, there is allowed
Page 5, Line 10a tax credit reservation with respect to income taxes imposed
Page 5, Line 11pursuant to this article 22 to any global film festival entity in
Page 5, Line 12an amount equal to the amount of qualified expenditures with
Page 5, Line 13an aggregate limit of five million dollars for that calendar
Page 5, Line 14year.
Page 5, Line 15(c) Subject to subsection (3)(f) of this section, for the
Page 5, Line 16calendar years commencing on or after January 1, 2030, but
Page 5, Line 17before January 1, 2037, there is allowed a tax credit reservation
Page 5, Line 18with respect to income taxes imposed pursuant to this article 22
Page 5, Line 19to any global film festival entity in an amount equal to the
Page 5, Line 20amount of qualified expenditures with an aggregate limit of
Page 5, Line 21three million dollars for each respective calendar year.
Page 5, Line 22(d) Subject to subsection (3)(f) of this section, for the
Page 5, Line 23calendar years commencing on or after January 1, 2027, but
Page 5, Line 24before January 1, 2037, there shall be allowed a tax credit
Page 5, Line 25reservation with respect to income taxes imposed pursuant to
Page 5, Line 26this article 22 to existing or small Colorado film festival
Page 5, Line 27entities in an amount equal to qualified expenditures with a
Page 6, Line 1combined aggregate of five hundred thousand dollars across
Page 6, Line 2all existing or small Colorado film festival entities for each
Page 6, Line 3respective calendar year.
Page 6, Line 4(e) The tax credit allowed pursuant to this section shall
Page 6, Line 5be administered by the office jointly with the Colorado office of
Page 6, Line 6film, television, and media and the division of business funding
Page 6, Line 7and incentives, or their successor divisions or offices.
Page 6, Line 8(f) The tax credit created in this section is not allowed to
Page 6, Line 9any qualified applicant unless at least one qualified global film
Page 6, Line 10festival entity commences the relocation of the festival to
Page 6, Line 11Colorado by January 1, 2026. The office shall determine if the
Page 6, Line 12relocation requirement of this subsection (3)(f) is satisfied and
Page 6, Line 13notify the department.
Page 6, Line 14(4) (a) A global film festival entity or an existing or
Page 6, Line 15small Colorado film festival entity may receive a tax credit
Page 6, Line 16pursuant to subsection (3) of this section in the calendar year in
Page 6, Line 17which the festival occurred or the calendar year following the
Page 6, Line 18year in which the festival occurred in accordance with the
Page 6, Line 19program policies and procedures determined by the office.
Page 6, Line 20(b) For purposes of this section, any qualified expenditure
Page 6, Line 21that occurred in the preceding eleven months prior to the
Page 6, Line 22commencement of a respective calendar year may be considered
Page 6, Line 23when determining the amount of tax credit for which a global
Page 6, Line 24film festival entity or an existing or small Colorado film
Page 6, Line 25festival entity is eligible.
Page 6, Line 26(5) (a) The office shall develop and publish program
Page 6, Line 27policies and procedures for the administration of this section,
Page 7, Line 1including application guidelines for a global film festival entity
Page 7, Line 2and for an existing or small Colorado film festival entity
Page 7, Line 3applying to receive a tax credit reservation or issuance under
Page 7, Line 4this section. The office may include guardrails or requirements
Page 7, Line 5that the applicant must satisfy before a tax credit reservation
Page 7, Line 6or issuance occurs.
Page 7, Line 7(b) When determining the priority of reservation of a tax
Page 7, Line 8credit for an existing or small Colorado film festival entity, if
Page 7, Line 9there are more requests for tax credit reservations than there
Page 7, Line 10are reservations available, the office must provide priority to
Page 7, Line 11existing or small Colorado film festival entities that:
Page 7, Line 12(I) Demonstrate historic and projected community and
Page 7, Line 13economic impact;
Page 7, Line 14(II) Demonstrate community support through letters of
Page 7, Line 15recommendation including, but not limited to, letters from
Page 7, Line 16local elected officials or local governing bodies such as the
Page 7, Line 17mayor, city council, or the board of county commissioners;
Page 7, Line 18(III) Increase geographic equity;
Page 7, Line 19(IV) Demonstrate innovation and uniqueness; or
Page 7, Line 20(V) Address a market or environmental change outside of
Page 7, Line 21their control.
Page 7, Line 22(6) (a) For a global film festival entity to claim a tax
Page 7, Line 23credit pursuant to subsection (3) of this section, the global film
Page 7, Line 24festival entity must apply to the office for the reservation of a
Page 7, Line 25tax credit at a time and in a manner determined in the program
Page 7, Line 26policies and procedures. A global film festival entity may
Page 7, Line 27request reservations of tax credits in an amount up to
Page 8, Line 1thirty-four million dollars in accordance with subsection (3) of
Page 8, Line 2this section. The application must include a statement of intent
Page 8, Line 3by the global film festival entity to organize a festival in
Page 8, Line 4Colorado. The global film festival entity must submit, in
Page 8, Line 5conjunction with the application, any documentation necessary
Page 8, Line 6to demonstrate that it meets the definition of a global film
Page 8, Line 7festival entity, as defined in subsection (2)(a) of this section, and
Page 8, Line 8any other information required by the office. If the office is
Page 8, Line 9making a multi-year tax credit reservation, it shall document
Page 8, Line 10the multi-year tax credit reservation in a written tax credit
Page 8, Line 11agreement.
Page 8, Line 12(b) The office shall review each tax credit reservation
Page 8, Line 13application submitted by a global film festival entity and, based
Page 8, Line 14on the information provided in the application, the office shall
Page 8, Line 15make a determination of whether the global film festival entity
Page 8, Line 16will receive a tax credit reservation and the amount of that
Page 8, Line 17reservation. The office must establish and provide written
Page 8, Line 18notice to the global film festival entity of the minimum festival
Page 8, Line 19operating requirements as part of the reservation process for
Page 8, Line 20the global film festival entity to receive a tax credit, which
Page 8, Line 21may include, but are not limited to, the number of films required
Page 8, Line 22to be screened, the marketing budget, the length of the festival
Page 8, Line 23in days, the location of the festival, the time during the year
Page 8, Line 24when the festival is required to take place, and other
Page 8, Line 25guardrails as determined by the office.
Page 8, Line 26(c) Upon completion of the qualified expenditures, a
Page 8, Line 27global film festival entity that received a tax credit
Page 9, Line 1reservation from the office must retain a certified public
Page 9, Line 2accountant licenced to practice in the state or a certified
Page 9, Line 3public accounting firm that is registered in the state to review
Page 9, Line 4and report in writing, and in accordance with professional
Page 9, Line 5standards, regarding the accuracy of the financial documents
Page 9, Line 6that detail the expenses incurred in the course of the
Page 9, Line 7organization of the film festival in Colorado. The certified
Page 9, Line 8public accountant's written report must include documentation
Page 9, Line 9of the global film festival entity's qualified expenditures. This
Page 9, Line 10report must also show which qualified expenditures occurred
Page 9, Line 11within Colorado and which occurred outside Colorado
Page 9, Line 12according to standards developed by the office.
Page 9, Line 13(d) A global film festival entity shall apply to the office
Page 9, Line 14for tax credit issuance in accordance with the program policies
Page 9, Line 15and procedures.
Page 9, Line 16(e) When the office is satisfied that the global film
Page 9, Line 17festival entity is eligible for a refundable tax credit, the office
Page 9, Line 18shall issue to the global film festival entity a tax credit
Page 9, Line 19certificate that evidences the global film festival entity's right
Page 9, Line 20to claim the tax credit allowed under subsection (3) of this
Page 9, Line 21section. The tax credit certificate must include the taxpayer's
Page 9, Line 22name, the taxpayer's social security number or federal
Page 9, Line 23employer identification number, the approved tax credit amount,
Page 9, Line 24and the income tax year for which the tax credit is being
Page 9, Line 25allowed.
Page 9, Line 26(7) (a) An existing or small Colorado film festival entity
Page 9, Line 27may apply to the office for the reservation of a tax credit at a
Page 10, Line 1time and in a manner determined by the office and published in
Page 10, Line 2the program policies and procedures. An existing or small
Page 10, Line 3Colorado film festival entity may request a reservation of a
Page 10, Line 4tax credit for up to five hundred thousand dollars or another
Page 10, Line 5maximum amount as determined by the office. The application
Page 10, Line 6must include a statement of intent by the existing or small
Page 10, Line 7Colorado film festival entity to organize a festival in
Page 10, Line 8Colorado.
Page 10, Line 9(b) The office shall review each application for a tax
Page 10, Line 10credit reservation submitted by an existing or small Colorado
Page 10, Line 11film festival entity and, based on the information provided in
Page 10, Line 12the application, the office shall make a determination of
Page 10, Line 13whether the existing or small Colorado film festival entity will
Page 10, Line 14be eligible to receive a tax credit and the amount of the tax
Page 10, Line 15credit reservation that will be granted to the existing or small
Page 10, Line 16Colorado film festival entity. The office shall inform the
Page 10, Line 17existing or small Colorado film festival entity in writing as to
Page 10, Line 18whether it has approved or denied the application for a tax
Page 10, Line 19credit reservation, the amount of the reservation if approved,
Page 10, Line 20and the years of the reservation. If the office is making a
Page 10, Line 21multi-year tax credit reservation, it shall document the
Page 10, Line 22multi-year tax credit reservation in a written conditional
Page 10, Line 23agreement. The office may establish and provide written notice
Page 10, Line 24to the existing or small Colorado film festival entity of the
Page 10, Line 25minimum festival operating requirements as part of the
Page 10, Line 26reservation process for the existing or small Colorado film
Page 10, Line 27festival entity to receive a tax credit which may include, but
Page 11, Line 1are not limited to, the number of films required to be screened,
Page 11, Line 2the marketing budget, the length of the festival in days, the
Page 11, Line 3location of the festival, the time during the year when the
Page 11, Line 4festival is required to take place, and any other guardrails as
Page 11, Line 5determined by the office.
Page 11, Line 6(c) Upon completion of the qualified expenditures, an
Page 11, Line 7existing or small Colorado film festival entity that received
Page 11, Line 8approval for a tax credit reservation from the office must
Page 11, Line 9retain a certified public accountant licenced to practice in the
Page 11, Line 10state or a certified public accounting firm that is registered in
Page 11, Line 11the state to review and report in writing, and in accordance
Page 11, Line 12with professional standards, regarding the accuracy of the
Page 11, Line 13financial documents that detail the expenses incurred in the
Page 11, Line 14course of the organization of the film festival in Colorado. The
Page 11, Line 15certified public accountant's written report must include
Page 11, Line 16documentation of the existing or small Colorado film festival
Page 11, Line 17entity's qualified expenditures. This report must also show
Page 11, Line 18which qualified expenditures occurred within Colorado
Page 11, Line 19according to standards developed by the office.
Page 11, Line 20(d) The existing or small Colorado film festival entity
Page 11, Line 21shall apply to the office for tax credit issuance in accordance
Page 11, Line 22with the program policies and procedures.
Page 11, Line 23(e) When the office is satisfied that an existing or small
Page 11, Line 24Colorado film festival entity is eligible for a tax credit, the
Page 11, Line 25office shall issue to the existing or small Colorado film festival
Page 11, Line 26entity a refundable tax credit certificate that evidences the
Page 11, Line 27existing or small Colorado film festival entity's right to claim
Page 12, Line 1the tax credit allowed under subsection (3) of this section. The
Page 12, Line 2tax credit certificate must include the taxpayer's name, the
Page 12, Line 3taxpayer's social security number or federal employer
Page 12, Line 4identification number, the approved tax credit amount, and the
Page 12, Line 5calendar year for which the tax credit is being allowed.
Page 12, Line 6(8) If a credit authorized by this section exceeds the
Page 12, Line 7income tax due on the income of the qualified global film
Page 12, Line 8festival entity or existing or small Colorado film festival
Page 12, Line 9entity, or the entity is a tax-exempt entity under 26 U.S.C. sec.
Page 12, Line 10501 (c)(3) of the federal "Internal Revenue Code of 1986" that
Page 12, Line 11does not pay Colorado state income taxes, the excess tax credit
Page 12, Line 12may not be carried forward and one hundred percent of the
Page 12, Line 13unclaimed value of the tax credit shall be refunded by the
Page 12, Line 14department to the film festival entity.
Page 12, Line 15(9) This section is repealed, effective December 31, 2041.
Page 12, Line 16SECTION 2. Act subject to petition - effective date. This act
Page 12, Line 17takes effect at 12:01 a.m. on the day following the expiration of the
Page 12, Line 18ninety-day period after final adjournment of the general assembly; except
Page 12, Line 19that, if a referendum petition is filed pursuant to section 1 (3) of article V
Page 12, Line 20of the state constitution against this act or an item, section, or part of this
Page 12, Line 21act within such period, then the act, item, section, or part will not take
Page 12, Line 22effect unless approved by the people at the general election to be held in
Page 12, Line 23November 2026 and, in such case, will take effect on the date of the
Page 12, Line 24official declaration of the vote thereon by the governor.