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.
This Unofficial Version Includes Committee
Amendments Not Yet Adopted on Second Reading
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:
Page 3, Line 16(I) Is either a tax-exempt entity under section 501 (c)(3) of
Page 3, Line 17the internal revenue code or a for-profit entity; and
Page 3, Line 18(II) Has a multi-decade operating history and a verifiable
Page 3, Line 19annual track record of attracting one hundred thousand or
Page 3, Line 20more in-person ticket sales and tens of thousands of
Page 3, Line 21out-of-state and international attendees for the film festival.
Page 3, Line 22(b) "Existing or small Colorado film festival entity"
Page 3, Line 23means a film festival entity that is not a global film festival
Page 3, Line 24entity. A film festival may be an entity that provides video,
Page 3, Line 25television, new media, or content creation exhibition.
Page 3, Line 26(c) "Office" means the Colorado office of economic
Page 3, Line 27development created in section 24-48.5-101 (1).
Page 4, Line 1(d) "Qualified expenditure" means a payment made by a
Page 4, Line 2global film festival entity or an existing Colorado or small
Page 4, Line 3film festival entity operating in Colorado in connection with
Page 4, Line 4the film festival taking place in Colorado. Qualified
Page 4, Line 5expenditures for an existing or small Colorado film festival are
Page 4, Line 6limited to those incurred in Colorado in accordance with
Page 4, Line 7policies and procedures determined by the office. "Qualified
Page 4, Line 8expenditure" includes, but is not limited to:
Page 4, Line 9(I) Salaries and benefits of employees of the entity that
Page 4, Line 10operates the festival;
Page 4, Line 11(II) Costs associated with contractors that facilitate the
Page 4, Line 12operation of the festival;
Page 4, Line 13(III) Costs associated with the rental of films, equipment,
Page 4, Line 14storage, venues, and office or other space to operate the
Page 4, Line 15festival;
Page 4, Line 16(IV) Costs associated with rental expenses or building
Page 4, Line 17operation expenses of the entity that operates the festival;
Page 4, Line 18(V) Travel expenses for individuals associated with the
Page 4, Line 19entity that operates the festival, including travel expenses for
Page 4, Line 20contractors and talent;
Page 4, Line 21(VI) Any other costs incurred by the entity associated
Page 4, Line 22with insurance, tickets, marketing, and other related film
Page 4, Line 23programming events;
Page 4, Line 24(VII) Capital costs to operate the film festival in
Page 4, Line 25Colorado; and
Page 4, Line 26(VIII) Depreciable investments in real or business
Page 4, Line 27personal property in Colorado that are needed to operate the
Page 5, Line 1film festival.
Page 5, Line 2(3) (a) Subject to subsection (3)(e) of this section, for
Page 5, Line 3calendar years commencing on or after January 1, 2027, but
Page 5, Line 4before January 1, 2037, there is allowed a credit with respect to
Page 5, Line 5income taxes imposed pursuant to this article 22 to any global
Page 5, Line 6film festival entity or existing or small Colorado film festival
Page 5, Line 7entity that receives a tax credit certificate pursuant to this
Page 5, Line 8section in the amount of the tax credit certificate.
Page 5, Line 9(b) The office may reserve a tax credit for the benefit of
Page 5, Line 10any global film festival entity pursuant to subsection (6) of this
Page 5, Line 11section subject to the following limits:
Page 5, Line 12(I) For calendar years commencing on or after January 1,
Page 5, Line 132027, but before January 1, 2029, the aggregate amount of tax
Page 5, Line 14credit that may be reserved is four million dollars per year;
Page 5, Line 15(II) For the calendar year commencing on January 1, 2029,
Page 5, Line 16the aggregate amount of tax credit that may be reserved is five
Page 5, Line 17million dollars; and
Page 5, Line 18(III) For calendar years commencing on or after January
Page 5, Line 191, 2030, but before January 1, 2037, the aggregate amount of tax
Page 5, Line 20credit that may be reserved is three million dollars per year.
Page 5, Line 21(c) Subject to subsection (3)(e) of this section, the office
Page 5, Line 22may reserve a tax credit for the benefit of any existing or small
Page 5, Line 23Colorado film festival entity pursuant to subsection (7) of this
Page 5, Line 24section. For calendar years commencing on or after January 1,
Page 5, Line 252027, but before January 1, 2037, the aggregate amount of tax
Page 5, Line 26credit that may be reserved pursuant to this subsection (3)(c) is
Page 5, Line 27five hundred thousand dollars per year.
Page 6, Line 1(d) The tax credit allowed pursuant to this section shall
Page 6, Line 2be administered by the office jointly with the Colorado office of
Page 6, Line 3film, television, and media and the division of business funding
Page 6, Line 4and incentives, or their successor divisions or offices.
Page 6, Line 5(e) The tax credit created in this section is not allowed to
Page 6, Line 6any qualified applicant unless at least one qualified global film
Page 6, Line 7festival entity commences the relocation of the festival to
Page 6, Line 8Colorado by January 1, 2026. The office shall determine if the
Page 6, Line 9relocation requirement of this subsection(3)(e)is satisfied and
Page 6, Line 10notify the department.
Page 6, Line 11(4) (a) Subject to the program policies and procedures
Page 6, Line 12established by the office, a global film festival entity may be
Page 6, Line 13allowed a tax credit for each tax year in which a film festival
Page 6, Line 14occurred. A global film festival entity or an existing Colorado
Page 6, Line 15film festival entity may be allowed an additional tax credit in
Page 6, Line 16the subsequent tax year with respect to any qualified
Page 6, Line 17expenditures incurred in that year.
Page 6, Line 18(b) For purposes of this section, any qualified expenditure
Page 6, Line 19that occurred in the preceding eleven months prior to the
Page 6, Line 20commencement of the year in which the film festival occurred
Page 6, Line 21may be added to the qualified expenditures that occurred
Page 6, Line 22during the tax year in which the festival occurred when
Page 6, Line 23determining the amount of tax credit for which a global film
Page 6, Line 24festival entity or an existing or small Colorado film festival
Page 6, Line 25entity is eligible.
Page 6, Line 26(c) Only one credit is allowed in accordance with this
Page 6, Line 27section with respect to a qualified expenditure.
Page 7, Line 1(5) (a) The office shall develop and publish program
Page 7, Line 2policies and procedures for the administration of this section,
Page 7, Line 3including application guidelines for a global film festival entity
Page 7, Line 4and for an existing or small Colorado film festival entity
Page 7, Line 5applying to receive a tax credit reservation or issuance under
Page 7, Line 6this section. The office may include guardrails or requirements
Page 7, Line 7that the applicant must satisfy before a tax credit reservation
Page 7, Line 8or issuance occurs.
Page 7, Line 9(b) When determining the priority of reservation of a tax
Page 7, Line 10credit for an existing or small Colorado film festival entity, if
Page 7, Line 11there are more requests for tax credit reservations than there
Page 7, Line 12are reservations available, the office must provide priority to
Page 7, Line 13existing or small Colorado film festival entities that:
Page 7, Line 14(I) Demonstrate historic and projected community and
Page 7, Line 15economic impact;
Page 7, Line 16(II) Demonstrate community support through letters of
Page 7, Line 17recommendation including, but not limited to, letters from
Page 7, Line 18local elected officials or local governing bodies such as the
Page 7, Line 19mayor, city council, or the board of county commissioners;
Page 7, Line 20(III) Increase geographic equity;
Page 7, Line 21(IV) Demonstrate innovation and uniqueness; or
Page 7, Line 22(V) Address a market or environmental change outside of
Page 7, Line 23their control.
Page 7, Line 24(6) (a) For a global film festival entity to claim a tax
Page 7, Line 25credit pursuant to subsection (3) of this section, the global film
Page 7, Line 26festival entity must apply to the office for the reservation of a
Page 7, Line 27tax credit at a time and in a manner determined in the program
Page 8, Line 1policies and procedures. A global film festival entity may
Page 8, Line 2request reservations of tax credits in an amount up to
Page 8, Line 3thirty-four million dollars in accordance with subsection (3) of
Page 8, Line 4this section. The application must include a statement of intent
Page 8, Line 5by the global film festival entity to organize a festival in
Page 8, Line 6Colorado. The global film festival entity must submit, in
Page 8, Line 7conjunction with the application, any documentation necessary
Page 8, Line 8to demonstrate that it meets the definition of a global film
Page 8, Line 9festival entity, as defined in subsection (2)(a) of this section, and
Page 8, Line 10any other information required by the office. If the office is
Page 8, Line 11making a multi-year tax credit reservation, it shall document
Page 8, Line 12the multi-year tax credit reservation in a written tax credit
Page 8, Line 13agreement.
Page 8, Line 14(b) The office shall review each tax credit reservation
Page 8, Line 15application submitted by a global film festival entity and, based
Page 8, Line 16on the information provided in the application, the office shall
Page 8, Line 17make a determination of whether the global film festival entity
Page 8, Line 18will receive a tax credit reservation and the amount of that
Page 8, Line 19reservation. The office must establish and provide written
Page 8, Line 20notice to the global film festival entity of the minimum festival
Page 8, Line 21operating requirements as part of the reservation process for
Page 8, Line 22the global film festival entity to receive a tax credit, which
Page 8, Line 23may include, but are not limited to, the number of films required
Page 8, Line 24to be screened, the marketing budget, the length of the festival
Page 8, Line 25in days, the location of the festival, the time during the year
Page 8, Line 26when the festival is required to take place, and other
Page 8, Line 27guardrails as determined by the office.
Page 9, Line 1(c) Upon completion of the qualified expenditures, a
Page 9, Line 2global film festival entity that received a tax credit
Page 9, Line 3reservation from the office must retain a certified public
Page 9, Line 4accountant licenced to practice in the state or a certified
Page 9, Line 5public accounting firm that is registered in the state to review
Page 9, Line 6and report in writing, and in accordance with professional
Page 9, Line 7standards, regarding the accuracy of the financial documents
Page 9, Line 8that detail the expenses incurred in the course of the
Page 9, Line 9organization of the film festival in Colorado. The certified
Page 9, Line 10public accountant's written report must include documentation
Page 9, Line 11of the global film festival entity's qualified expenditures. This
Page 9, Line 12report must also show which qualified expenditures occurred
Page 9, Line 13within Colorado and which occurred outside Colorado
Page 9, Line 14according to standards developed by the office.
Page 9, Line 15(d) A global film festival entity shall apply to the office
Page 9, Line 16for tax credit issuance in accordance with the program policies
Page 9, Line 17and procedures.
Page 9, Line 18(e) When the office is satisfied that the global film
Page 9, Line 19festival entity is eligible for a refundable tax credit, the office
Page 9, Line 20shall issue to the global film festival entity a tax credit
Page 9, Line 21certificate that evidences the global film festival entity's right
Page 9, Line 22to claim the tax credit allowed under subsection (3) of this
Page 9, Line 23section. The amount of the tax credit is the lesser of the
Page 9, Line 24qualified expenditures calculated pursuant to subsection (4) of
Page 9, Line 25this section or the amount of the tax credit reserved pursuant
Page 9, Line 26to subsection (6)(b) of this section. The tax credit certificate
Page 9, Line 27must include the taxpayer's name, the taxpayer's social security
Page 10, Line 1number or federal employer identification number, the approved
Page 10, Line 2tax credit amount, and the income tax year for which the tax
Page 10, Line 3credit is being allowed.
Page 10, Line 4(7) (a) An existing or small Colorado film festival entity
Page 10, Line 5may apply to the office for the reservation of a tax credit at a
Page 10, Line 6time and in a manner determined by the office and published in
Page 10, Line 7the program policies and procedures. An existing or small
Page 10, Line 8Colorado film festival entity may request a reservation of a
Page 10, Line 9tax credit for up to five hundred thousand dollars or another
Page 10, Line 10maximum amount as determined by the office. The application
Page 10, Line 11must include a statement of intent by the existing or small
Page 10, Line 12Colorado film festival entity to organize a festival in
Page 10, Line 13Colorado.
Page 10, Line 14(b) The office shall review each application for a tax
Page 10, Line 15credit reservation submitted by an existing or small Colorado
Page 10, Line 16film festival entity and, based on the information provided in
Page 10, Line 17the application, the office shall make a determination of
Page 10, Line 18whether the existing or small Colorado film festival entity will
Page 10, Line 19be eligible to receive a tax credit and the amount of the tax
Page 10, Line 20credit reservation that will be granted to the existing or small
Page 10, Line 21Colorado film festival entity. The office shall inform the
Page 10, Line 22existing or small Colorado film festival entity in writing as to
Page 10, Line 23whether it has approved or denied the application for a tax
Page 10, Line 24credit reservation, the amount of the reservation if approved,
Page 10, Line 25and the years of the reservation. If the office is making a
Page 10, Line 26multi-year tax credit reservation, it shall document the
Page 10, Line 27multi-year tax credit reservation in a written conditional
Page 11, Line 1agreement. The office may establish and provide written notice
Page 11, Line 2to the existing or small Colorado film festival entity of the
Page 11, Line 3minimum festival operating requirements as part of the
Page 11, Line 4reservation process for the existing or small Colorado film
Page 11, Line 5festival entity to receive a tax credit which may include, but
Page 11, Line 6are not limited to, the number of films required to be screened,
Page 11, Line 7the marketing budget, the length of the festival in days, the
Page 11, Line 8location of the festival, the time during the year when the
Page 11, Line 9festival is required to take place, and any other guardrails as
Page 11, Line 10determined by the office.
Page 11, Line 11(c) Upon completion of the qualified expenditures, an
Page 11, Line 12existing or small Colorado film festival entity that received
Page 11, Line 13approval for a tax credit reservation from the office must
Page 11, Line 14retain a certified public accountant licenced to practice in the
Page 11, Line 15state or a certified public accounting firm that is registered in
Page 11, Line 16the state to review and report in writing, and in accordance
Page 11, Line 17with professional standards, regarding the accuracy of the
Page 11, Line 18financial documents that detail the expenses incurred in the
Page 11, Line 19course of the organization of the film festival in Colorado. The
Page 11, Line 20certified public accountant's written report must include
Page 11, Line 21documentation of the existing or small Colorado film festival
Page 11, Line 22entity's qualified expenditures. This report must also show
Page 11, Line 23which qualified expenditures occurred within Colorado
Page 11, Line 24according to standards developed by the office.
Page 11, Line 25(d) The existing or small Colorado film festival entity
Page 11, Line 26shall apply to the office for tax credit issuance in accordance
Page 11, Line 27with the program policies and procedures.
Page 12, Line 1(e) When the office is satisfied that an existing or small
Page 12, Line 2Colorado film festival entity is eligible for a tax credit, the
Page 12, Line 3office shall issue to the existing or small Colorado film festival
Page 12, Line 4entity a refundable tax credit certificate that evidences the
Page 12, Line 5existing or small Colorado film festival entity's right to claim
Page 12, Line 6the tax credit allowed under subsection (3) of this section. The
Page 12, Line 7tax credit certificate must include the taxpayer's name, the
Page 12, Line 8taxpayer's social security number or federal employer
Page 12, Line 9identification number, the approved tax credit amount, and the
Page 12, Line 10calendar year for which the tax credit is being allowed.
Page 12, Line 11(8) If a credit authorized by this section exceeds the
Page 12, Line 12income tax due on the income of the qualified global film
Page 12, Line 13festival entity or existing or small Colorado film festival
Page 12, Line 14entity, or the entity is a tax-exempt entity undersection 501
Page 12, Line 15(c)(3) of the internal revenue code that does not pay Colorado
Page 12, Line 16state income taxes, the excess tax credit may not be carried
Page 12, Line 17forward and one hundred percent of the unclaimed value of the
Page 12, Line 18tax credit shall be refunded by the department to the film
Page 12, Line 19festival entity.A tax-exempt entity shall file a return pursuant
Page 12, Line 20to section 39-22-601 (7)(b).
Page 12, Line 21(9) This section is repealed, effective December 31, 2041.
Page 12, Line 22SECTION 2. Act subject to petition - effective date. This act
Page 12, Line 23takes effect at 12:01 a.m. on the day following the expiration of the
Page 12, Line 24ninety-day period after final adjournment of the general assembly; except
Page 12, Line 25that, if a referendum petition is filed pursuant to section 1 (3) of article V
Page 12, Line 26of the state constitution against this act or an item, section, or part of this
Page 12, Line 27act within such period, then the act, item, section, or part will not take
Page 13, Line 1effect unless approved by the people at the general election to be held in
Page 13, Line 2November 2026 and, in such case, will take effect on the date of the
Page 13, Line 3official declaration of the vote thereon by the governor.