(A)(1) This section authorizes a tax credit against state income tax for production companies that produce a commercial production being an advertisement, composed of moving images and words, that is recorded on film, videotape, or digital medium in South Carolina for multi-market distribution by way of television networks, cable, satellite, or motion picture theaters. This credit is not available to companies that produce industrial videos, television broadcasts, cable and satellite networks, and news sporting events. The tax credit may be earned by a production company at the time of its investment in a state-certified production and must be calculated as a percentage of the investment according to the total base investment dollars certified. If total base investment is greater than five hundred thousand dollars in the aggregate during the calendar year, the production company is allowed a tax credit of ten percent of the actual South Carolina investment made by that production company. The State has annually one million dollars in total tax credits to disburse to all eligible production companies. This tax credit must be distributed to the eligible production company in the same order that the eligible production company’s application for the tax credit is approved by the Department of Parks, Recreation and Tourism.

(2) If the entire credit is not used in the year earned, the remaining credit may be carried forward and applied against income tax liabilities for the next ten years. An entity taxed as a corporation for South Carolina income tax purposes shall claim the credit allowed pursuant to this section on its corporation income tax return. An entity not taxed as a corporation shall claim the credit on the returns of the partners or members as follows:

(a) corporate partners or members shall claim their shares of the credit on their corporate income tax returns;

(b) individual partners or members shall claim their shares of the credit on their individual income tax returns; and

(c) partners or members that are estates or trusts shall claim their shares of the credit on their fiduciary income tax returns.

(B)(1) The Director of the Department of Parks, Recreation and Tourism and the South Carolina Film Commission shall determine, through adoption of rules and promulgation of regulations, the criteria for qualification of a project according to this section. Promulgation of these regulations are subject to the Administrative Procedures Act.

(2) Certification by the Department of Parks, Recreation and Tourism must be submitted to both the production company and to the Director of the Department of Revenue.

(3) A production company applying for the credit must reimburse the Department of Revenue for any audits required in relation to granting the credit.

(4) The Director of the Department of Parks, Recreation and Tourism, in consultation with the Director of the South Carolina Film Commission, shall adopt rules and promulgate regulations otherwise necessary to carry out the intent and purposes of this section.