Okla. Stat. tit. 68, § 68-2357.101

A. Except as otherwise provided in subsection E of this

section, for taxable years beginning after December 31, 2004, and

ending before January 1, 2015, there shall be allowed against the

tax imposed by Section 2355 of this title, a credit equal to twenty-

five percent (25%) of the amount of profit made by a taxpayer from

investment in an existing Oklahoma film or music project with a

production company to pay for production costs that is reinvested by

the taxpayer with the production company to pay for the production

cost of the production company for a new Oklahoma film or music

project.

B. In no event shall the amount of the credit provided for in

subsection A of this section for an eligible taxpayer exceed the tax

liability of the taxpayer in a calendar year.

C. The Oklahoma Tax Commission shall have the authority to

prescribe forms for purposes of claiming the credit authorized in

subsection A of this section. The forms shall include, but not be

limited to, requests for information that prove who the investment

was with, the amount of the original investment and the amount of

the profit realized from the investment.

D. As used in this section:

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1. "Film" means a professional single media, multimedia program

or feature, which is not child sexual abuse material as defined in

subsection A of Section 1024.1 of Title 21 of the Oklahoma Statutes

or obscene material as defined in paragraph 1 of subsection B of

Section 1024.1 of Title 21 of the Oklahoma Statutes including, but

not limited to, national advertising messages that are broadcast on

a national affiliate or cable network, fixed on film or digital

video, which can be viewed or reproduced and which is exhibited in

theaters, licensed for exhibition by individual television stations,

groups of stations, networks, cable television stations or other

means or licensed for home viewing markets;

2. "Music project" means a professional recording released on a

national or international level, whether via traditional

manufacturing or distributing or electronic distribution, using

technology currently in use or future technology including, but not

limited to, music CDs, radio commercials, jingles, cues, or

electronic device recordings;

3. "Production company" means a person who produces a film or

music project for exhibition in theaters, on television or

elsewhere;

4. "Total production cost" includes, but is not limited to:

a. wages or salaries of persons who have earned income

from working on a film or music project in this state,

including payments to personal services corporations

with respect to the services of qualified performing

artists, as determined under Section 62(a)(A) of the

Internal Revenue Code,

b. the cost of construction and operations, wardrobe,

accessories and related services,

c. the cost of photography, sound synchronization,

lighting and related services,

d. the cost of editing and related services,

e. rental of facilities and equipment, and

f. other direct costs of producing a film or music

project;

5. "Existing Oklahoma film or music project" means a film or

music project produced after July 1, 2005;

6. "Profit" means the amount made by the taxpayer to be

determined as follows:

a. the gross revenues less gross expenses, including

direct production, distribution and marketing costs

and an allocation of indirect overhead costs, of the

film or music project shall be multiplied by,

b. a ratio, the numerator of which is Oklahoma production

costs, as defined in paragraph 7 of this subsection,

and the denominator of which is total production

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costs, as defined in paragraph 4 of this subsection,

which shall be multiplied by,

c. the percent of the taxpayer's taxable income allocated

to Oklahoma in a taxable year, and

d. subtract from the result of the formula calculated
costs, as defined in paragraph 7 of this subsection,

and the denominator of which is total production

Oklahoma Statutes - Title 68. Revenue and Taxation Page 867

costs, as defined in paragraph 4 of this subsection,

which shall be multiplied by,

c. the percent of the taxpayer's taxable income allocated

to Oklahoma in a taxable year, and

d. subtract from the result of the formula calculated

pursuant to subparagraphs a through c of this

paragraph the profit made by a taxpayer from

investment in an existing Oklahoma film or music

project in previous taxable years. Profit shall

include either a net profit or net loss;

7. "Oklahoma production cost" means that portion of total

production costs which are incurred with any qualified vendor;

8. a. "Qualified vendor" means an Oklahoma entity which

provides goods or services to a production company and

for which:

(1) fifty percent (50%) or more of its employees are

Oklahoma residents, and

(2) fifty percent (50%) or more of gross wages, as

reported on Internal Revenue Service Form W-2 or

Form 1099, are paid to Oklahoma residents.

b. For purposes of this paragraph, an employee shall

include a self-employed individual reporting income

from a qualified vendor on Internal Revenue Service

Form 1040.

c. The Oklahoma Tax Commission shall prescribe forms by

which an entity may be certified to a production

company as a qualified vendor for purposes of this

section; and

9. "Investment" means costs associated with the original

production company. Film or music projects acquired from an

original production company do not qualify as investment under

subsection A of this section.

E. No credit otherwise authorized by the provisions of this

section may be claimed for any event, transaction, investment,

expenditure or other act occurring on or after July 1, 2010, for

which the credit would otherwise be allowable. The provisions of

this subsection shall cease to be operative on July 1, 2012.

Beginning July 1, 2012, the credit authorized by this section may be

claimed for any event, transaction, investment, expenditure or other

act occurring on or after July 1, 2012, according to the provisions

of this section.