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, 24-48.5-116, amend
Page 2, Line 3(5)(b) as follows:
Page 2, Line 424-48.5-116. Film, television, and media - performance-based
Page 2, Line 5incentive for film production in Colorado - Colorado office of film,
Page 2, Line 6television, and media operational account cash fund - creation -
Page 2, Line 7definition. (5) (b) The
moneysPage 2, Line 8appropriated to the office for the operation of the office, for the
Page 2, Line 9performance-based incentive for film production in Colorado as specified
Page 2, Line 10in subsection (1) of this section,
andPage 2, Line 11specified in section 24-48.5-115 (3), and for other programming
Page 2, Line 12carried out by the office in accordance with section 24-48.5-115
Page 2, Line 13(2).
Page 2, Line 14SECTION 2. In Colorado Revised Statutes, add 39-22-571 as
Page 2, Line 15follows:
Page 2, Line 1639-22-571. Film festival incentive tax credit - tax preference
Page 2, Line 17performance statement - legislative declaration - definitions - repeal.
Page 2, Line 18(1) (a) The general assembly finds and declares that:
Page 2, Line 19(I) Colorado's film festival industry has the ability to be
Page 2, Line 20a true economic driver in the state; and
Page 2, Line 21(II) By providing a tax incentive to big film festivals to
Page 2, Line 22relocate to Colorado, a single big festival could bring over
Page 2, Line 23twenty thousand out of state visitors, leading to a boost in
Page 3, Line 1local economies, an increase in sales and use tax revenue, and
Page 3, Line 2job creation.
Page 3, Line 3(b) In accordance with section 39-21-304 (1), which
Page 3, Line 4requires each bill that creates a new tax expenditure to include
Page 3, Line 5a tax preference performance statement as part of a statutory
Page 3, Line 6legislative declaration, the general assembly finds and
Page 3, Line 7declares that the purpose of the tax credits provided for in this
Page 3, Line 8section is to induce designated behavior by taxpayers and to
Page 3, Line 9provide a reduction in income tax liability for certain businesses
Page 3, Line 10or individuals by allowing film festival organizers to receive a
Page 3, Line 11credit against income tax or an income tax refund for qualified
Page 3, Line 12expenditures if certain criteria are met. Specifically, these tax
Page 3, Line 13expenditures are intended to incentize film festival organizers
Page 3, Line 14to relocate to Colorado and, in particular, for big film
Page 3, Line 15festivals to boost local economies, increase sales and use tax
Page 3, Line 16revenue, and create new jobs.
Page 3, Line 17(c) The general assembly and the state auditor shall
Page 3, Line 18measure the effectiveness of the tax credit in achieving the
Page 3, Line 19purposes specified in subsection (1)(b) of this section based on the
Page 3, Line 20amount of qualified expenditures made in Colorado, the number
Page 3, Line 21of visitors attending film festivals in the state, and the amount
Page 3, Line 22of state and local sales and use tax collected that can be
Page 3, Line 23attributed to such film festivals.
Page 3, Line 24(2) As used in this section, unless the context otherwise
Page 3, Line 25requires:
Page 3, Line 26(a) "Existing or small Colorado film festival entity"
Page 3, Line 27means a film festival entity that is not a global film festival
Page 4, Line 1entity. An existing or small Colorado film festival entity may
Page 4, Line 2be an entity that provides video, television, new media, or
Page 4, Line 3content creation exhibition.
Page 4, Line 4(b) "Global film festival entity" means a film festival
Page 4, Line 5entity that:
Page 4, Line 6(I) Is either a tax-exempt entity under section 501 (c)(3) of
Page 4, Line 7the internal revenue code or a for-profit entity; and
Page 4, Line 8(II) Has a multi-decade operating history and a verifiable
Page 4, Line 9annual track record of attracting one hundred thousand or
Page 4, Line 10more in-person ticket sales and tens of thousands of
Page 4, Line 11out-of-state and international attendees for the film festival.
Page 4, Line 13(c) "Office" means the Colorado office of economic
Page 4, Line 14development created in section 24-48.5-101 (1).
Page 4, Line 15(d) "Qualified expenditure" means a payment made by a
Page 4, Line 16global film festival entity or an existing or small Colorado
Page 4, Line 17film festival entity operating in Colorado in connection with
Page 4, Line 18the film festival taking place in Colorado. Qualified
Page 4, Line 19expenditures for an existing or small Colorado film festival are
Page 4, Line 20limited to those incurred in Colorado in accordance with
Page 4, Line 21policies and procedures determined by the office. "Qualified
Page 4, Line 22expenditure" includes, but is not limited to:
Page 4, Line 23(I) Salaries and benefits of employees of the entity that
Page 4, Line 24operates the festival;
Page 4, Line 25(II) Costs associated with contractors that facilitate the
Page 4, Line 26operation of the festival;
Page 4, Line 27(III) Costs associated with the rental of films, equipment,
Page 5, Line 1storage, venues, and office or other space to operate the
Page 5, Line 2festival;
Page 5, Line 3(IV) Costs associated with rental expenses or building
Page 5, Line 4operation expenses of the entity that operates the festival;
Page 5, Line 5(V) Travel expenses for individuals associated with the
Page 5, Line 6entity that operates the festival, including travel expenses for
Page 5, Line 7contractors and talent;
Page 5, Line 8(VI) Any other costs incurred by the entity associated
Page 5, Line 9with insurance, tickets, marketing, and other related film
Page 5, Line 10programming events;
Page 5, Line 11(VII) Capital costs to operate the film festival in
Page 5, Line 12Colorado; and
Page 5, Line 13(VIII) Depreciable investments in real or business
Page 5, Line 14personal property in Colorado that are needed to operate the
Page 5, Line 15film festival.
Page 5, Line 16(3) (a) Subject to subsection (3)(e) of this section, for tax
Page 5, Line 17years commencing on or after January 1, 2027, but before
Page 5, Line 18January 1, 2037, there is allowed a credit with respect to income
Page 5, Line 19taxes imposed pursuant to this article 22 to any global film
Page 5, Line 20festival entity or existing or small Colorado film festival
Page 5, Line 21entity that receives a tax credit certificate pursuant to this
Page 5, Line 22section in the amount of the tax credit certificate.
Page 5, Line 23(b) The office may reserve a tax credit for the benefit of
Page 5, Line 24any global film festival entity pursuant to subsection (6) of this
Page 5, Line 25section subject to the following limits:
Page 5, Line 26(I) For calendar years commencing on or after January 1,
Page 5, Line 272027, but before January 1, 2029, the aggregate amount of tax
Page 6, Line 1credit that may be reserved is four million dollars per year;
Page 6, Line 2(II) For the calendar year commencing on January 1, 2029,
Page 6, Line 3the aggregate amount of tax credit that may be reserved is five
Page 6, Line 4million dollars; and
Page 6, Line 5(III) For calendar years commencing on or after January
Page 6, Line 61, 2030, but before January 1, 2037, the aggregate amount of tax
Page 6, Line 7credit that may be reserved is three million dollars per year.
Page 6, Line 8(c) Subject to subsection (3)(e) of this section, the office
Page 6, Line 9may reserve a tax credit for the benefit of any existing or small
Page 6, Line 10Colorado film festival entity pursuant to subsection (7) of this
Page 6, Line 11section. For calendar years commencing on or after January 1,
Page 6, Line 122027, but before January 1, 2037, the aggregate amount of tax
Page 6, Line 13credit that may be reserved pursuant to this subsection (3)(c) is
Page 6, Line 14five hundred thousand dollars per year.
Page 6, Line 15(d) The tax credit allowed pursuant to this section shall
Page 6, Line 16be administered by the office jointly with the Colorado office of
Page 6, Line 17film, television, and media and the division of business funding
Page 6, Line 18and incentives, or their successor divisions or offices.
Page 6, Line 19(e) The tax credit created in this section is not allowed to
Page 6, Line 20any qualified applicant unless at least one qualified global film
Page 6, Line 21festival entity commences the relocation of the festival to
Page 6, Line 22Colorado by January 1, 2026. The office shall determine if the
Page 6, Line 23relocation requirement of this subsection(3)(e)is satisfied and
Page 6, Line 24notify the department.
Page 6, Line 25(4) (a) Subject to the program policies and procedures
Page 6, Line 26established by the office, a global film festival entity or an
Page 6, Line 27existing or small Colorado film festival entity may be allowed
Page 7, Line 1a tax credit for each tax year in which the global film festival
Page 7, Line 2entity or existing or small Colorado film festival entity hosts
Page 7, Line 3a film festival in Colorado. A global film festival entity or an
Page 7, Line 4existing or small Colorado film festival entity may be allowed
Page 7, Line 5an additional tax credit in the subsequent tax year with respect
Page 7, Line 6to any qualified expenditures incurred in that year.
Page 7, Line 7(b) For purposes of this section, when determining the
Page 7, Line 8amount of tax credit for which a global film festival entity or
Page 7, Line 9existing or small Colorado film festival entity is eligible, any
Page 7, Line 10qualified expenditure that occurred in the eleven months prior
Page 7, Line 11to the commencement of a tax year in which the film festival
Page 7, Line 12entity hosted a film festival in Colorado may be added to the
Page 7, Line 13qualified expenditures that occurred during the tax year in
Page 7, Line 14which the film festival entity hosted a film festival in Colorado.
Page 7, Line 15(c) Only one credit is allowed in accordance with this
Page 7, Line 16section with respect to a qualified expenditure.
Page 7, Line 17(5) (a) The office shall develop and publish program
Page 7, Line 18policies and procedures for the administration of this section,
Page 7, Line 19including application guidelines for a global film festival entity
Page 7, Line 20and for an existing or small Colorado film festival entity
Page 7, Line 21applying to receive a tax credit reservation or issuance under
Page 7, Line 22this section. The office may include guardrails or requirements
Page 7, Line 23that the applicant must satisfy before a tax credit reservation
Page 7, Line 24or issuance occurs.
Page 7, Line 25(b) When determining the priority and amount of a
Page 7, Line 26reservation of a tax credit for an existing or small Colorado
Page 7, Line 27film festival entity, if there are more requests for tax credit
Page 8, Line 1reservations than there are reservations available, the office
Page 8, Line 2must provide priority to existing or small Colorado film
Page 8, Line 3festival entities according to a competitive evaluation. The
Page 8, Line 4office shall evaluate applications based on the following
Page 8, Line 5criteria and shall prioritize applications from an entity that:
Page 8, Line 6(I) Faces a substantial market or environmental change
Page 8, Line 7that demonstratively impacts the ongoing viability of the entity
Page 8, Line 8and is outside of the entity's control;
Page 8, Line 9(II) Demonstrates historic community and economic
Page 8, Line 10impact, with special consideration being given to an entity that
Page 8, Line 11has run a festival for more than ten years;
Page 8, Line 12(III) Demonstrates innovation and uniqueness;
Page 8, Line 13(IV) Increases geographic equity; or
Page 8, Line 14(V) Demonstrates community support through letters of
Page 8, Line 15recommendation including, but not limited to, letters that
Page 8, Line 16include demonstrations of historic and economic impact from:
Page 8, Line 17(A) A local elected official, such as a mayor; or
Page 8, Line 18(B) A local governing body, such as a city council or
Page 8, Line 19board of county commissioners.
Page 8, Line 20(6) (a) For a global film festival entity to claim a tax
Page 8, Line 21credit pursuant to subsection (3) of this section, the global film
Page 8, Line 22festival entity must apply to the office for the reservation of a
Page 8, Line 23tax credit at a time and in a manner determined in the program
Page 8, Line 24policies and procedures. A global film festival entity may
Page 8, Line 25request reservations of tax credits in an amount up to
Page 8, Line 26thirty-four million dollars in accordance with subsection (3) of
Page 8, Line 27this section. The application must include a statement of intent
Page 9, Line 1by the global film festival entity to organize a festival in
Page 9, Line 2Colorado. The global film festival entity must submit, in
Page 9, Line 3conjunction with the application, any documentation necessary
Page 9, Line 4to demonstrate that it meets the definition of a global film
Page 9, Line 5festival entity, as defined in subsection (2)(a) of this section, and
Page 9, Line 6any other information required by the office. If the office is
Page 9, Line 7making a multi-year tax credit reservation, it shall document
Page 9, Line 8the multi-year tax credit reservation in a written tax credit
Page 9, Line 9agreement.
Page 9, Line 10(b) The office shall review each tax credit reservation
Page 9, Line 11application submitted by a global film festival entity and, based
Page 9, Line 12on the information provided in the application, the office shall
Page 9, Line 13make a determination of whether the global film festival entity
Page 9, Line 14will receive a tax credit reservation and the amount of that
Page 9, Line 15reservation. The office must establish and provide written
Page 9, Line 16notice to the global film festival entity of the minimum festival
Page 9, Line 17operating requirements as part of the reservation process for
Page 9, Line 18the global film festival entity to receive a tax credit, which
Page 9, Line 19may include, but are not limited to, the number of films required
Page 9, Line 20to be screened, the marketing budget, the length of the festival
Page 9, Line 21in days, the location of the festival, the time during the year
Page 9, Line 22when the festival is required to take place, and other
Page 9, Line 23guardrails as determined by the office.
Page 9, Line 24(c) Upon completion of the qualified expenditures, a
Page 9, Line 25global film festival entity that received a tax credit
Page 9, Line 26reservation from the office must retain a certified public
Page 9, Line 27accountant licenced to practice in the state or a certified
Page 10, Line 1public accounting firm that is registered in the state to review
Page 10, Line 2and report in writing, and in accordance with professional
Page 10, Line 3standards, regarding the accuracy of the financial documents
Page 10, Line 4that detail the expenses incurred in the course of the
Page 10, Line 5organization of the film festival in Colorado. The certified
Page 10, Line 6public accountant's written report must include documentation
Page 10, Line 7of the global film festival entity's qualified expenditures. This
Page 10, Line 8report must also show which qualified expenditures occurred
Page 10, Line 9within Colorado and which occurred outside Colorado
Page 10, Line 10according to standards developed by the office.
Page 10, Line 11(d) A global film festival entity shall apply to the office
Page 10, Line 12for tax credit issuance in accordance with the program policies
Page 10, Line 13and procedures.
Page 10, Line 14(e) When the office is satisfied that the global film
Page 10, Line 15festival entity is eligible for a refundable tax credit, the office
Page 10, Line 16shall issue to the global film festival entity a tax credit
Page 10, Line 17certificate that evidences the global film festival entity's right
Page 10, Line 18to claim the tax credit allowed under subsection (3) of this
Page 10, Line 19section. The amount of the tax credit is the lesser of the
Page 10, Line 20qualified expenditures calculated pursuant to subsection (4) of
Page 10, Line 21this section or the amount of the tax credit reserved pursuant
Page 10, Line 22to subsection (6)(b) of this section. The tax credit certificate
Page 10, Line 23must include the taxpayer's name, the taxpayer's social security
Page 10, Line 24number or federal employer identification number, the approved
Page 10, Line 25tax credit amount, and the income tax year for which the tax
Page 10, Line 26credit is being allowed.
Page 10, Line 27(7) (a) An existing or small Colorado film festival entity
Page 11, Line 1may apply to the office for the reservation of a tax credit at a
Page 11, Line 2time and in a manner determined by the office and published in
Page 11, Line 3the program policies and procedures. An existing or small
Page 11, Line 4Colorado film festival entity may request a reservation of a
Page 11, Line 5tax credit for up to five hundred thousand dollars or another
Page 11, Line 6maximum amount as determined by the office. The application
Page 11, Line 7must include a statement of intent by the existing or small
Page 11, Line 8Colorado film festival entity to organize a festival in
Page 11, Line 9Colorado.
Page 11, Line 10(b) The office shall review each application for a tax
Page 11, Line 11credit reservation submitted by an existing or small Colorado
Page 11, Line 12film festival entity and, based on the information provided in
Page 11, Line 13the application, the office shall make a determination of
Page 11, Line 14whether the existing or small Colorado film festival entity will
Page 11, Line 15be eligible to receive a tax credit and the amount of the tax
Page 11, Line 16credit reservation that will be granted to the existing or small
Page 11, Line 17Colorado film festival entity. The office shall inform the
Page 11, Line 18existing or small Colorado film festival entity in writing as to
Page 11, Line 19whether it has approved or denied the application for a tax
Page 11, Line 20credit reservation, the amount of the reservation if approved,
Page 11, Line 21and the years of the reservation. If the office is making a
Page 11, Line 22multi-year tax credit reservation, it shall document the
Page 11, Line 23multi-year tax credit reservation in a written conditional
Page 11, Line 24agreement. The office may establish and provide written notice
Page 11, Line 25to the existing or small Colorado film festival entity of the
Page 11, Line 26minimum festival operating requirements as part of the
Page 11, Line 27reservation process for the existing or small Colorado film
Page 12, Line 1festival entity to receive a tax credit which may include, but
Page 12, Line 2are not limited to, the number of films required to be screened,
Page 12, Line 3the marketing budget, the length of the festival in days, the
Page 12, Line 4location of the festival, the time during the year when the
Page 12, Line 5festival is required to take place, and any other guardrails as
Page 12, Line 6determined by the office.
Page 12, Line 7(c) Upon completion of the qualified expenditures, an
Page 12, Line 8existing or small Colorado film festival entity that received
Page 12, Line 9approval for a tax credit reservation from the office must
Page 12, Line 10retain a certified public accountant licenced to practice in the
Page 12, Line 11state or a certified public accounting firm that is registered in
Page 12, Line 12the state to review and report in writing, and in accordance
Page 12, Line 13with professional standards, regarding the accuracy of the
Page 12, Line 14financial documents that detail the expenses incurred in the
Page 12, Line 15course of the organization of the film festival in Colorado. The
Page 12, Line 16certified public accountant's written report must include
Page 12, Line 17documentation of the existing or small Colorado film festival
Page 12, Line 18entity's qualified expenditures. This report must also show
Page 12, Line 19which qualified expenditures occurred within Colorado
Page 12, Line 20according to standards developed by the office.
Page 12, Line 21(d) The existing or small Colorado film festival entity
Page 12, Line 22shall apply to the office for tax credit issuance in accordance
Page 12, Line 23with the program policies and procedures.
Page 12, Line 24(e) When the office is satisfied that an existing or small
Page 12, Line 25Colorado film festival entity is eligible for a tax credit, the
Page 12, Line 26office shall issue to the existing or small Colorado film festival
Page 12, Line 27entity a refundable tax credit certificate that evidences the
Page 13, Line 1existing or small Colorado film festival entity's right to claim
Page 13, Line 2the tax credit allowed under subsection (3) of this section. The
Page 13, Line 3amount of the tax credit is the lesser of the qualified
Page 13, Line 4expenditures calculated pursuant to subsection (4) of this
Page 13, Line 5section or the amount of the tax credit reserved pursuant to
Page 13, Line 6subsection (7)(b) of this section. The tax credit certificate must
Page 13, Line 7include the taxpayer's name, the taxpayer's social security
Page 13, Line 8number or federal employer identification number, the approved
Page 13, Line 9tax credit amount, and the calendar year for which the tax
Page 13, Line 10credit is being allowed.
Page 13, Line 11(8) If a credit authorized by this section exceeds the
Page 13, Line 12income tax due on the income of the qualified global film
Page 13, Line 13festival entity or existing or small Colorado film festival
Page 13, Line 14entity, or the entity is a tax-exempt entity undersection 501
Page 13, Line 15(c)(3) of the internal revenue code that does not pay Colorado
Page 13, Line 16state income taxes, the excess tax credit may not be carried
Page 13, Line 17forward and one hundred percent of the unclaimed value of the
Page 13, Line 18tax credit shall be refunded by the department to the film
Page 13, Line 19festival entity.A tax-exempt entity shall file a return pursuant
Page 13, Line 20to section 39-22-601 (7)(b).
Page 13, Line 21(9) This section is repealed, effective December 31, 2041.
Page 13, Line 22SECTION 3. Act subject to petition - effective date. This act
Page 13, Line 23takes effect at 12:01 a.m. on the day following the expiration of the
Page 13, Line 24ninety-day period after final adjournment of the general assembly; except
Page 13, Line 25that, if a referendum petition is filed pursuant to section 1 (3) of article V
Page 13, Line 26of the state constitution against this act or an item, section, or part of this
Page 13, Line 27act within such period, then the act, item, section, or part will not take
Page 14, Line 1effect unless approved by the people at the general election to be held in
Page 14, Line 2November 2026 and, in such case, will take effect on the date of the
Page 14, Line 3official declaration of the vote thereon by the governor.