Motion Pictures and Entertainment Productions

KRS tit. XII, ch. 154, subch. 61

in effect

KRS 154.61-010 Definitions for subchapter

154.61-010. Definitions for subchapter As used in this subchapter: (1) "Above-the-line production crew" means employees involved with the production of a motion picture or entertainment production whose salaries are negotiated prior to commencement of production, such as actors, directors, producers, and writers; (2) "Animated production" means a nationally distributed feature-length film created with the rapid display of a sequence of images using 2-D or 3-D graphics of artwork or model positions in order to create an illusion of movement; (3) "Approved company" means an eligible company approved for incentives provided under KRS 141.383 and 154.61-020; (4) "Below-the-line production crew" means employees involved with the production of a motion picture or entertainment production except above-the-line production crew. "Below-the-line production crew" includes but is not limited to: (a) Casting assistants; (b) Costume design; (c) Extras; (d) Gaffers; (e) Grips; (f) Location managers; (g) Production assistants; (h) Set construction staff; and (i) Set design staff; (5) "Cabinet" means the Cabinet for Economic Development; (6) "Certified audit" means an audit that: (a) Contains production-related expenditures; (b) Is completed within one hundred eighty (180) days of the completion of production in Kentucky; and (c) Is conducted in accordance with the office's standards established by administrative regulations promulgated in accordance with KRS Chapter 13A, including the adoption of expenditure sampling procedures; (7) "Commonwealth" means the Commonwealth of Kentucky; (8) "Compensation" means: (a) Compensation included in adjusted gross income as calculated in KRS 141.019; and (b) The following: 1. Employer-paid payroll taxes; 2. Union and guild benefits; 3. Workers' compensation insurance premiums; 4. Payroll service fees; and 5. Qualifying per diem; (9) "Continuous film production" means a motion picture or entertainment production that: (a) 1. Has a projected minimum spend of ten million dollars ($10,000,000) for qualifying expenditures and qualifying payroll expenditures, which may be a prorated amount based on the total budget of the production; and 2. Has a minimum of fifty percent (50%) of the funds available and the ability to raise the remaining funds necessary to complete the filming and production, which may be verified by: a. Bank statements or other financial documents; or b. A fundraising plan at the request of the office; (b) Demonstrates a distribution contract for each motion or entertainment production; and (c) Maintains: 1. An apprenticeship program or on -the-job training program as defined in KRS 343.010; or 2. Partners with a film studies program with an accredited institution of postsecondary education located in the Commonwealth; (10) "Council" means the Kentucky Film Lea dership Council created in KRS 154.12 - 282; (11) "Documentary" means a production based upon factual information and not subjective interjections; (12) "Eligible company" means any person that intends to film or produce a motion picture or entertainment production in the Commonwealth; (13) "Employee" has the same meaning as in KRS 141.010, and, for purposes of this subchapter, also may include the employees or independent contractors of an approved company or the employees of a loan -out entity engaged by an approved company if they meet the requirements of KRS 141.310; (14) "Employer-paid payroll taxes" means the tax paid by an approved company as an employer under the Federal Insurance Contributions Act, 26 U.S.C. sec. 3101 et seq., and the approved company 's share of contributions required under KRS Chapter 341; (15) "Feature-length film" means a live -action or animated production that is: (a) More than thirty (30) minutes in length; and (b) Produced for distribution in theaters or via digital format, inclu ding broadcast, cable, and streaming; (16) "Heritage county" means a county where the county population ranking determined by the cabinet under KRS 154.21 -017 scores greater than or equal to ninety -seven (97); (17) "Industrial film" means a business -to-business film that may be viewed by the public, including but not limited to videos used for training or for viewing at a trade show; (18) "Kentucky-based company" has the same meaning as in KRS 164.6011; (19) "Loan-out entity" means a corporation, partnership, limited liability company, or other entity through which an artist or other person is loaned out to perform services for the approved company. A loan-out entity shall be registered and in good standing with the Kentucky Secretary of State. Notwithstanding the business organization, the loan-out entity and all employees of and other persons performing services for the loan-out entity shall be subject to all applicable provisions of the Kentucky personal income tax and any applicable payroll or other tax provisions; (20) (a) "Motion picture or entertainment production" means: 1. The following if filmed in whole or in part, or produced in whole or in part, in the Commonwealth: a. A feature-length film; b. A television program; c. An industrial film; d. A documentary; e. A video game; f. A music video; or g. A commercial; or 2. A national touring production of a Broadway show produced in Kentucky. (b) "Motion picture or entertainment production" does not include the filming or production of obscene material or television coverage of news or athletic events; (21) "Obscene" has the same meaning as in KRS 531.010; (22) "Office" means the Kentucky Film Office created in KRS 154.12-280; (23) "Payroll service fees" means administrative fees paid by an approved company to a third-party payroll service company providing Kentucky -based payroll processing for above-the-line and below-the-line production crew members; (24) "Person" has the same meaning as in KRS 141.010; (25) (a) "Qualifying expenditure" means expenditures made in the Commonwealth for the following if directly used in or for a motion picture or entertainment production: 1. The production script and synopsis; 2. Set construction and operations, wardrobe, accessories, and related services; 3. Lease or rental of real property in Kentucky as a set location; 4. Photography, sound synchronization, lighting, and related services; 5. Editing and related services; 6. Rental of facilities and equipment; 7. Vehicle leases; 8. Food; and 9. Accommodations. (b) "Qualifying expenditure" does not include: 1. Kentucky sales and use tax paid by the approved company on the qualifying expenditure; or 2. Distribution expenses; (26) "Qualifying payroll expenditure" means compensation paid to above-the-line crew and below-the line crew while working on a motion picture or entertainment production in the Commonwealth if the compensation is for services performed in the Commonwealth; (27) "Qualifying per diem": (a) Means: 1. Meal and incidental allowance per diems, including those not taken on set, in the amounts established by the United States General Services Administration, if incurred in the Commonwealth; and 2. Hotel and other overnight living accommodations per diems, in the amounts established by the United States General Services Administration, if incurred in the Commonwealth; and (b) Includes any amounts that: 1. Exceed the limits in paragraph (a)1. and 2. of this subsection; and 2. Are included in taxable compensation and subject to the withholding required under KRS Chapter 341; (28) "Resident" has the same meaning as in KRS 141.010; (29) "Secretary" means the secretary of the Cabinet for Economic Development; (30) "Tax incentive agreement" means the agreement entered into pursuant to KRS 154.61-030 between the council and the approved company; (31) "Television program" means any live-action or animated production or documentary, including but not limited to: (a) An episodic series; (b) A miniseries; (c) A television movie; or (d) A television pilot; that is produced for distribution on television via broadcast, cable, or any digital format, including but not limited to cable, satellite, internet, or mobile electronic devices; (32) "Union and guild benefits" means any mandatory contributions to pension, health, and welfare plans paid by an approved company or a third -party payroll service company pursuant to a union or guild agreement entered into for the provision of services by above-the-line or below-the-line production crew members; and (33) "Workers' compensation insurance premiums" means premiums paid by an approved company or a third-party payroll service company for the provision of workers' compensation covering above-the-line or below-the-line production crew members. Effective: July 15, 2026 History: Amended 2026 Ky. Acts ch. 194, sec. 4, effective July 15, 2026; and ch. 198, sec. 22, effective April 27, 2026. -- Amended 2025 Ky. Acts ch. 91, sec. 5, effective July 1, 2025. -- Amended 2023 Ky. Acts ch. 75, sec. 30, effective June 29, 2023. -- Created 2021 Ky. Acts ch. 156, sec. 17, effective June 29, 2021. Legislative Research Commission Note (7/15/2026). This statute was amended by 2026 Ky. Acts chs. 194 and 198, which do not appear to be in conflict and have been codified together.

KRS 154.61-020 Purposes -- Tax incentives for motion pictures and entertainment productions and continuous film productions

154.61-020. Purposes -- Tax incentives for motion pictures and entertainment productions and continuous film productions (1) The purposes of KRS 141.383 and this subchapter are to encourage: (a) The film and entertainment industry to choose locations in the Commonwealth for the filming and production of motion picture or entertainment productions; (b) The development of a film and entertainment industry in Kentucky; (c) Increased employment opportunities for the citizens of the Commonwealth within the film and entertainment industry; and (d) The development of a production and postproduction infrastructure in the Commonwealth for film production and touring Broadway show production facilities containing state-of-the-art technologies. (2) The council, together with the Department of Revenue, shall administer the tax credit established by KRS 141.383, this section, and KRS 154.61 -030. (3) To qualify for the tax incentive provided in subsection (5) of this section, the following requirements shal l be met: (a) For an approved company that films or produces a commercial in whole or in part in the Commonwealth, the minimum combined total of qualifying expenditures and qualifying payroll expenditures shall be two hundred thousand dollars ($200,000); and (b) For an approved company that is also a Kentucky -based company that: 1. Films or produces a feature-length film, television program, industrial film, video game, or music video in whole or in part in the Commonwealth, the minimum combined total of qu alifying expenditures and qualifying payroll expenditures shall be two hundred thousand dollars ($200,000); 2. Produces a national touring production of a Broadway show in whole or in part in the Commonwealth, the minimum combined total of qualifying expenditures and qualifying payroll expenditures shall be twenty thousand dollars ($20,000); or 3. Films or produces a documentary in whole or in part in the Commonwealth, the minimum combined total of qualifying expenditures and qualifying payroll expenditures shall be ten thousand dollars ($10,000); and (c) For an approved company that is not a Kentucky -based company that: 1. Films or produces a feature-length film, television program, industrial film, video game, or music video in whole or in part in the Commonwealth, the minimum combined total of qualifying expenditures and qualifying payroll expenditures shall be fo ur hundred thousand dollars ($400,000); or 2. Films or produces a documentary in whole or in part in the Commonwealth or that produces a national touring production of a Broadway show, the minimum combined total of qualifying expenditures and qualifying payroll expenditures shall be twenty thousand dollars ($20,000). (4) (a) Beginning on January 1, 2022, the total tax incentive approved under KRS 141.383 and this subchapter shall be limited to seventy-five million dollars ($75,000,000) for calendar year 2022 and each calendar year thereafter. (b) Beginning with calendar year 2024: 1. Twenty-five million dollars ($25,000,000) shall be allocated for all approved companies with a continuous film production; and 2. On the first day of July of each calendar year, any unused balance of the amount allocated under subparagraph 1. of this paragraph for continuous film productions shall be made available for all approved companies with motion picture or entertainment productions. (c) Beginning with calendar year 2026, any unallocated balance of the amount allocated in paragraph (a) of this subsection for the previous calendar year shall carry forward into the subsequent calendar year to be made available for approved companies with high-impact motion pictures, continuous film productions, or entertainment productions. The council shall promulgate administrative regulations in accordance with KRS Chapter 13A to establish the criteria for a high-impact motion picture or entertainment production. (5) (a) To qualify for the tax incentive available under KRS 141.383 and this subchapter, all applicants shall: 1. Begin filming or production in Kentucky within one hundred eighty (180) days of approval by the council; 2. Complete filming or production in Kentucky within two (2) years of the filming or production start date; and 3. Submit a certified audit to the office. (b) The tax credit shall be against the Kentucky income tax imposed under KRS 141.020 or 141.040, and the limited liability entity tax imposed under KRS 141.0401, and shall be refundable as provided in KRS 141.383. (c) 1. For a continuous film production filmed or produced in any Kentucky county, or a feature-length film, television program, industrial film, documentary, video game, music video, or national touring production of a Broadway show filmed or produced in its entirety in a heritage county, the amount of the incentive shall be equal to thirty-five percent (35%) of the approved company's: a. Qualifying expenditures; b. Qualifying payroll expenditures paid to resident and nonresident below-the-line production crew; and c. Qualifying payroll expenditures paid to resident and nonresident above-the-line production crew not to exceed one million dollars ($1,000,000) in payroll expenditures per employee. 2. a. To the extent the approved company films or produces a motion picture or continuous film production in part in a heritage county and in part in a Kentucky county that is not a heritage county, the approved company shall be eligible to receive the incentives provided in this paragraph for those expenditures incurred in the heritage county and all other expenditures shall be subject to the incentives provided in paragraph (d) of this subsection. b. The approved company shall track the requisite expenditures by county. If the approved company can demonstrate to the satisfaction of the cabinet that it is not practical to use a separate accounting method to determine the expenditures by county, the approved company shall determine the correct expenditures by county using an alternative method approved by the cabinet. (d) For a commercial filmed or produced in any Kentucky county, or a feature- length film, television program, industrial film, documentary, video game, music video or national touring production of a Broadway show filmed or produced in whole or in part in any Kentucky county other than in a heritage county, the amount of the incentive shall be equal to: 1. Thirty percent (30%) of the approved company's: a. Qualifying expenditures; b. Qualifying payroll expenditures paid to below -the-line production crew that are not residents; and c. Qualifying payroll expenditures paid to above -the-line production crew that are not residents, not to exceed one million dollars ($1,000,000) in payroll expenditures per employee; and 2. Thirty-five percent (35%) of the approved company's: a. Qualifying payroll expenditures paid to resident below -the-line production crew; and b. Qualifying payroll expenditures paid to resident above -the-line production crew not to exceed one million dollars ($1,000,000) in payroll expenditures per employee. Effective: July 15, 2026 History: Amended 2026 Ky. Acts ch. 194, sec. 5, effective July 15, 2026; and ch. 198, sec. 23, effective April 27, 2026. -- Amended 2025 Ky. Acts ch. 91, sec. 6, effective July 1, 2025. -- Amended 2023 Ky. Acts ch. 75, sec. 31, effective June 29, 2023. -- Created 2021 Ky. Acts ch. 156, sec. 18, effective June 29, 2021. Legislative Research Commission Note (7/15/2026). This statute was amended by 20 26 Ky. Acts chs. 194 and 198, which do not appear to be in conflict and have been codified together.

KRS 154.61-030 Applications -- Tax incentive agreements -- Fee -- Approval -- Cost report -- Review

154.61-030. Applications -- Tax incentive agreements -- Fee -- Approval -- Cost report -- Review (1) An eligible company shall, prior to incurring any expenditure for which recovery will be sought, file an application for tax incentives with the office. The application shall include: (a) The name and address of the applicant; (b) Verification that the applicant is a Kentucky-based company; (c) The preliminary production script or a detailed synopsis of the script; (d) The locations where the filming or production will occur; (e) The anticipated date on which filming or production shall begin in Kentucky; (f) The anticipated date on which the applicant will complete incurring expenditures in Kentucky; (g) The total anticipated qualifying expen ditures; (h) The total anticipated qualifying payroll expenditures for resident and nonresident above-the-line crew by county; (i) The total anticipated qualifying payroll expenditures for resident and nonresident below-the-line crew by county; (j) The address of a Kentucky location at which records of the production will be kept; (k) An affirmation that if not for the incentive offered under this subchapter, the eligible company would not film or produce the production in the Commonwealth; and (l) Any other information the office may require. (2) The office shall notify the eligible company within thirty (30) days after receiving the application that: (a) The application is complete; or (b) Additional information is required. (3) Upon receipt of the application and any additional information submitted by the office and cabinet, the council shall consider all submitted information and, if appropriate, authorize the execution of a tax incentive agreement between the council and the approved company, if the amount of anticipated tax credit from the application would not make the total tax credit approved for the calendar year exceed the annual tax credit cap under KRS 154.61 -020(4). (4) The tax incentive agreement shall include the following provisions: (a) The duties and responsibilities of the parties; (b) A detailed description of the motion picture or entertainment production for which incentives are requested; (c) The anticipated qualifying expenditures and qualifying payroll expenditures for resident and nonresident above-the-line and below-the-line crews by county; (d) The minimum combined total of qualifying expenditures and qualifying payroll expenditures necessary for the approved company to qualify for incentives; (e) That the approved company shall: 1. Begin filming or production in Kentucky within one hundred eighty (180) days of approval by the council; and 2. Complete production in Kentucky within two (2) years of their production start date; (f) That the motion picture or entertainment produc tion shall not include obscene materials and shall not negatively impact the economy or the tourism industry of the Commonwealth; (g) That the execution of the agreement is not a guarantee of tax incentives and that actual receipt of the incentives shall b e contingent upon the approved company meeting the requirements established by the tax incentive agreement; (h) That the approved company shall submit to the office and cabinet within one hundred eighty (180) days of the completion of production in Kentuck y for the motion picture or entertainment production: 1. A detailed cost report of the qualifying expenditures and qualifying payroll expenditures; 2. Certified audit; and 3. The latest version of the production script at the time of cost report submission; (i) That the approved company shall provide the office and cabinet with documentation that the approved company or the associated loan -out entity has withheld income tax as required by KRS 141.310 or the individual income tax rate imposed by KRS 141.020 on all qualified payroll expenditures for which an incentive under this subchapter is sought; (j) That, if the cabinet determines that the approved company has failed to comply with any of its obligations under the tax incentive agreement: 1. The council may deny the incentives available to the approved company; 2. Both the council and the Department of Revenue may pursue any remedy provided under the tax incentive agreement; 3. The council may terminate the tax incentive agreement; and 4. Both the council and the Department of Revenue may pursue any other remedy at law to which it may be entitled; (k) That the cabinet and the Department of Revenue shall monitor the tax incentive agreement; (l) That the approved company shall provide to the cabinet and the Department of Revenue all information necessary to monitor the tax incentive agreement; (m) That the council may share information with the Department of Revenue and the Interim Joint Committee on Appropriations and Revenue or any other entity the cabinet determines is necessary for the purposes of monitoring and enforcing the terms of the tax incentive agreement; (n) That the motion picture or entertainment production shall contain an acknowledgment that the motion picture or entertainment production was produced or filmed in the Commonwealth of Kentucky; (o) That the approved company shall include screen credits in its final production, indicating the approved company received tax incentives from the Commonwealth of Kentucky; (p) Terms of default; (q) The method and procedures by which the approved company shall request and receive the incentive provided under KRS 141.383 and 154.61-020; (r) That the approved company may be required to pay an administrative fee as authorized under subsection (5) of this section; (s) The approved company may be required to pay a fee of two thousand dollars ($2,000) for expenses incurred as a result of preparation of the tax incentive agreement; and (t) Any other provisions deemed necessary or appropriate by the parties to the tax incentive agreement. (5) The council may require the approved company to pay an administrative fee, the amount of which shall be established by administrative regulation promulgated in accordance with KRS Chapter 13A. The administrative fee shall not exceed one - half of one percent (0.5%) of the estimated amount of tax incentive sought or five hundred dollars ($500), whichever is greater. (6) Prior to commencement of activity as provided in a tax incentive agreement, the tax incentive agreement shall be approved by the council. Following approval by the council, the tax incentive agreement shall be s ubmitted to the Government Contract Review Committee established by KRS 45A.705 for review, as provided in KRS 45A.695, 45A.705, and 45A.725. (7) The council shall notify the Department of Revenue following approval of an approved company. The notification shall include the name of the approved company, the name of the motion picture or entertainment production, the estimated amount of qualifying expenditures, the estimated date on which the approved company will complete filming or production in Kentucky, and any other information required by the department. (8) Within one hundred eighty days (180) days of completion of production in Kentucky for the motion picture or entertainment production, the approved company shall submit to the council: (a) A detailed cost report of: 1. Qualifying expenditures; 2. Qualifying payroll expenditures for resident and nonresident above -the- line crew by county; and 3. Qualifying payroll expenditures for resident and nonresident below -the- line crew by county; (b) The latest version of the production script available at the time of cost report submission; and (c) The certified audit. (9) (a) Cabinet staff shall review all information submitted for accuracy and shall confirm that all relevant provisions of the tax incentive agreement have been met. (b) Upon confirmation that all requirements of the tax incentive agreement have been met, cabinet staff shall review the latest version of the production script available at the time of cost report submission, and if they determine that the motion picture or entertainment production does not: 1. Contain visual or implied scenes that are obscene; or 2. Negatively impact the economy or the tourism industry of the Commonwealth; the council shall forward the detailed cost report to the Department of Revenue for calculation of the refundable credit. (10) The Department of Revenue shall: (a) Verify that the approved company withheld the proper amount of income tax on qualifying payroll expenditures; and (b) Notify the council of the total amount of refundable credit available on qualifying expenditures and qualifying payroll expenditures. Effective: July 15, 2026 History: Amended 2026 Ky. Acts ch. 194, sec. 6, effective July 15, 2026. -- Amended 2025 Ky. Acts ch. 91, sec. 7, effective July 1, 2025. -- Amended 2023 Ky. Acts ch. 75, sec. 32, effective June 29, 2023. -- Created 2021 Ky. Acts ch. 156, sec. 19, effective June 29, 2021.

Source: Kentucky Legislative Research Commission (legislature.ky.gov)URL: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=50600Fetched: 10/20/2026