 |
Oklahoma Administrative Code (Last Updated: March 11, 2021) |
 |
TITLE 725. Oklahoma Tourism and Recreation Department |
|
Chapter 35. The Oklahoma Film and Music Office |
|
Subchapter 1. Oklahoma Film Enhancement Rebate Program |
SECTION 725:35-1-3. Program requirements and qualification
Latest version.
- (a) Production companies cannot use this Program in addition to the sales tax rebate provided in Title 68, Section 3624 of the Oklahoma Statutes.(b) Production companies shall provide an affidavit as required by law.(c) The following is a list of qualifying Oklahoma expenditures:(1) Above and below-the-line wages or salaries paid to Oklahoma residents(2) Wages or salaries paid to Oklahoma Expatriates (as described in item (d) below)(3) Salaries for resident and non-resident above-the-line personnel paid to loan-out corporations or limited liability companies registered to do business with the Oklahoma Secretary of State's Office. No more than Twenty-five percent (25%) of total rebated amount can be comprised of qualifying above-the-line salaries(4) Underlying rights for screenplay and novels paid to an Oklahoma entity or individuals with an Oklahoma tax liability (also subject to the 25% cap detailed above)(5) The cost of construction and operations, wardrobe, accessories and related services procured in Oklahoma or paid to an Oklahoma company(6) The cost of photography, sound synchronization, lighting and related services(7) Rental of facilities and equipment paid to an Oklahoma company(8) Other direct costs of pre-production, production and post production of a film to include:(A) Location scouting expenditures made in Oklahoma(B) Employer paid payroll taxes for Oklahoma employees, including SUI, FUI, FICA, and Workers Comp(C) Union fringe paid to Oklahoma crew(D) Shipping and postage for packages originating within Oklahoma(E) Hotel costs(F) Completion bonding if utilizing an Oklahoma-based company(G) Production insurance if utilizing an Oklahoma-based company(H) The purchase of airline tickets for the purposes of location scouting and production of the film if utilizing an Oklahoma-based travel agency(I) Per Diem paid to cast and crew for Oklahoma filming dates(J) Third party audits conducted by pre-certified Oklahoma accounting firms(d) Oklahoma Expatriate Program: Included in the definition of qualifying "crew" are wages and salaries paid to an individual registered as an Oklahoma Expatriate by the Oklahoma Film & Music Office. The Expatriate roster consists of Oklahoma below-the-line crew not currently residing in Oklahoma, who have pre-registered with the Oklahoma Film & Music Office, by first meeting all requirements. That roster will be made available to producers in an effort to supplement Oklahoma's existing crew base.(1) If a producer chooses to hire one of the qualifying crew members whose name appears on that roster, wages and salaries paid to that person will qualify as an Expenditure or Production Cost and count towards the minimum requirement of Twenty-five Thousand ($25,000) in Oklahoma expenditures.(2) Before rebate payment can be made, producer must provide proof to the Oklahoma Film & Music Office that the individual has filed (or has agreed in writing to file) an Oklahoma income tax return for the year services were rendered on the production to the Oklahoma Film & Music Office.(3) A further requirement is that in exchange for utilizing a crew member from the Expatriate Roster as a qualifying local expenditure, the production must accept assignment of an intern provided by an Oklahoma institution of higher education or Career Tech for an agreed upon length of time during the course of the production (to be assigned to the expatriate or other appropriate personnel).(e) Third Party Audit Requirement: In order to be eligible to receive rebate monies, the production must retain the services of an independent certified public accountant to serve as a Third Party Auditor. In order for this to be a rebatable expenditure, the production must appoint a Third Party Auditor who is licensed to do business in the state of Oklahoma and who shall not be related to the producer. The Director of the Oklahoma Film & Music Office must be provided with the name, address and telephone number of the independent auditor proposed by the producer in order to make contact with the auditor prior to beginning the audit. The audit shall be performed in accordance with auditing standards generally accepted in the United States of America and the auditor shall have sufficient knowledge of accounting principles and practices generally recognized in the film and television industries. The auditor shall present a final report based upon agreed-upon procedures:(1) Only actual paid expenditures clearly and demonstrably in Oklahoma for the qualified production may be recorded and certified as direct production expenses or qualified personnel expenditures.(2) The costs to be recorded are actual costs and shall not include any mark-ups or profit additions. These costs must be made in Oklahoma; must be directly attributable to the production or distribution of the qualified production which is the subject of the Oklahoma Film Enhancement Rebate Program; and must be subject to taxation in Oklahoma.(3) The cost report must be in US dollars and the period during which the expenditures were incurred must be disclosed.(4) It is the eligible production company's responsibility to ensure that all of the required information is provided.(5) For payments made to loan out companies or limited liability companies, the auditor must verify that the loan out or LLC is registered with the Oklahoma Secretary of State's Office to do business in the state of Oklahoma.(6) Auditor must ensure that salaries for both resident and non-resident above-the-line personnel paid to loan-out corporations or limited liability companies registered to do business in Oklahoma do not comprise more than Twenty-five percent (25%) of the total amount being submitted for rebate.(f) End Credit Requirement: The following screen credit and the current Oklahoma Film and Music Office logo or written confirmation thereof must be included in the end credit crawl of all release prints of a completed short or long-form film: "Filmed in Oklahoma utilizing the Oklahoma Film Enhancement Rebate Program."(g) Rebate Payout Timeline: For expenditures made in FY10 (July 1, 2009 - June 30, 2010) the rebate is payable on or after July 1, 2010 pursuant to the production meeting all requirements of the Oklahoma Film Enhancement Rebate Program. Thereafter, rebates will be paid out immediately after all requirements have been met with no fiscal year delay. Beginning July 1, 2010, and pending receipt of results and supporting documentation of Third Party Audit described in 2D, the Oklahoma Film & Music Office will approve or disapprove of all claims within a period of thirty (30) days. The Oklahoma Tax Commission shall, upon notification of approval from the Oklahoma Film & Music Office, issue payment for all approved claims.(h) When, Where and How to Apply for the Rebate:(1) Applications must be submitted at least sixty (60) calendar days but no more than one hundred eighty (180) calendar days prior to the start of production. Applications submitted more than 180 calendar days or less than 60 days prior to the scheduled start of production will not be accepted.(2) Applications must be submitted to The Oklahoma Film & Music Office, 120 N. Robinson Avenue, Suite 600, Oklahoma City, OK 73102. Phone: (405) 230-8440 Website: www.oklahomafilm.org(3) Applicants must complete, sign and submit hard copies of all required forms, which are available from the Oklahoma Film and Music Office at the above address, or on line at www.oklahomafilm.org, and provide the latest version of the shooting script and production budget. Required forms are: Form A - Project Information; Form B - Application of Eligibility; Form C - Filming Permit; Form D - Statement of Budget; Form E - Expatriate Program Registration; Form F - Summary of Local Expenditures; Form G - Certification of Information; Form H - Confirmation of End Credit Inclusion; and Form I - Final Rebate Application.(4) Applicants must schedule an interview to discuss their application with the Oklahoma Film & Music Office by calling (405) 230-8440. The meeting must be attended by a producer or a line producer, unit production manager or production accountant or their designee, subject to the approval of the Director of the Oklahoma Film & Music Office.(i) Notice of Pre-Approval/Disapproval of Eligibility Application:(1) If the Eligibility Application is approved, applicant will receive a letter of eligibility signed by the Director of the Oklahoma Film & Music Office listing the items provided on the application and any supporting documentation currently on file with the office along with the projected amount of rebate pending the production meeting all requirements under the Oklahoma Film Enhancement Rebate Program. At that point, the projected rebate amount, and only that specific amount, will be earmarked for the production, providing applicant meets all benchmarks in the application process.(2) Receipt of the eligibility letter does not guarantee receipt of rebate monies. Final eligibility and the amount of the rebate will be determined after submission and review of the final application, the results of a Third Party Audit, and all required supporting documentation.(3) If the Eligibility Application is not approved, the Oklahoma Film & Music Office shall provide applicant with a notice of disapproval which shall state the reasons therefore.(4) As specified in Oklahoma statute, no more than one (1) application per fiscal year per specific production (based on production title, script and budget) will be accepted.(j) Requirements after Principal Photography:(1) No more than Ninety (90) calendar days after the payment of all Oklahoma expenditures, the production must submit the following to the Oklahoma Film & Music Office:(A) Final Rebate Application (Form I)(B) Final budget and signed statement of budget (Form D)(C) Amount of wages and qualifying expenditures(D) Final payroll report provided directly to the Oklahoma Film & Music Office from production payroll company(E) Final cast and crew lists(F) Daily production reports for all Oklahoma filming days(G) Completed Summary of Local Expenditures (Form F)(H) Final accounting ledger (all supporting documentation and receipts must be kept by the production company of record for a period of three (3) years)(I) The production company has filed or will file any Oklahoma tax return or tax document which may be required by law(J) Final production shooting schedule(K) Results of Third Party Audit conducted by an accounting firm that has been mutually agreed upon in advance. Third Party Audit will be at the expense of the production. This is deemed a qualifying expenditure if certified Oklahoma accounting firm is used.(L) Certification of Information, signed by producers and notarized before submission, stating among other things, that all information provided to the Oklahoma Film & Music Office for the purposes of qualifying for the Oklahoma Film Enhancement Rebate program are true and correct and that there are no unpaid salaries, invoices, reimbursements for damages or liens against the production entity in the State of Oklahoma. No rebate money will be released until this notarized documentation is on file with the Oklahoma Film & Music Office (Form G)(M) End Credit Requirement as described in Item 2E(2) Failure to provide the final information according to the time frame provided above may result in a loss of the credit. Within Thirty (30) days of all requirements being met, the Oklahoma Film & Music Office will issue a letter to Oklahoma Tax Commission, requesting rebate payment, copying production company contact.(k) Requesting Exemptions to Open Records Act:(1) The Oklahoma Film & Music Office is subject to the State of Oklahoma Open Records Act, which governs public access to the records of government agencies. Under Title 74 O.S. § 2231 of Oklahoma State Law, certain information provided to the Oklahoma Film & Music Office as a Division of the Oklahoma Tourism & Recreation Department, by a person or entity seeking economic advice from the Oklahoma Film & Music Office and any information compiled by us in response to submissions, may be kept confidential.(2) In order to protect confidentiality of the above referenced items, rebate applicants must submit a request in writing to the Oklahoma Film & Music Office along with the Eligibility Application requesting that the information be withheld from disclosure on the grounds that it constitutes trade secrets, proprietary information or that the information, if disclosed, would cause substantial injury to the competitive position of the applicant. Applicants must specify the information for which they are seeking protection along with clearly stated reasons for the requested exception.(3) The Oklahoma Film & Music Office reserves the right to determine whether the information submitted by the applicant will be withheld from disclosure. The Oklahoma Film & Music Office will notify the applicant of any requests for disclosure and notify the applicant as to whether the information will be disclosed.(l) Required Benchmarks for Rebate Eligibility Process:(1) 180 Calendar Days (and no sooner) Prior to Production you may submit an Eligibility Application for the Oklahoma Film Enhancement Rebate Program signed by authorized production personnel along with all other required documentation.(2) 60 Calendar Days (minimum) Prior to Production, a production must show proof that fifty percent (50%) of the production budget is in place in the form of a signed and certified letter of intent from a recognized financier or by written verification of the amount of the production's balance from a recognized financial institution. Letter must include name, address, phone number and contact name and account number for financier/bank for verification purposes. Note: Sixty (60) days prior to production is the last point at which a production may revise their Eligibility Application to increase their projected rebate amount and have monies earmarked in advance, subject to availability of funds.(3) 30 Calendar Days (minimum) Prior to Production (via the same methods described for Fifty percent (50%) verification above), production must show proof of ability to cash flow the production on previously established date of commencement of Production. Also required at Thirty (30) days:(A) Copy of the shooting schedule and inclusion on revisions distribution list (or as soon as available prior to principal photography).(B) Latest version of production budget and signed Statement of Budget (Form D)(C) Latest version of the script and inclusion in revisions distribution list(D) Latest version of Crew List tagged as resident and non-resident hires(E) Copy of the completion bond (where applicable, see Guidelines, Item 6A, D3)(F) Copy of the Certificate of General Liability, carrying a minimum of One Million Dollars ($1,000,000) (USD) in coverage(G) Proof of Workers Compensation Policy pursuant to Oklahoma State law(H) Legal Counsel name and contact information for producers and financiers(I) Additional documents as may be requested by the Oklahoma Film & Music Office(4) If a production delays the start of Production as provided in the eligibility application process, its rebate eligibility will be pushed the same length of time between its initial start date and its newly revised start date. Any productions behind it in the eligibility cue with start dates within this window of time will move ahead, thereby having first claim to rebate funds. Should a production push the start of production a second time, it will move to the back of the eligibility cue. Should a production push its start of production a third time, its Eligibility Application becomes null and void. A subsequent re-application will be delayed until the next fiscal year.(5) Eligibility is non-transferable. Each Eligibility Application shall be filed under the title of the screenplay submitted to the Oklahoma Film & Music Office. Projects deemed eligible for the rebate under each application shall only be eligible to the extent that project is substantially based on the screenplay previously submitted and on file with the Oklahoma Film & Music Office and supporting budget submitted for said project title.