Current through Register Vol. 42, No. 11, August 30, 2024
(1) The Qualified Production Company shall
engage a CPA to perform the Final Incentive Audit of the Qualified Production
Company's Production Expenditures on the State-Certified Production and such CPA
shall prepare a Report verifying each Production Expenditure.
(2) A CPA engaged to perform a Final Incentive
Audit shall:
(a) be independent, as that term
is used in Generally Accepted Auditing Standards, from the Qualified Production
Company and any of its owners or affiliates;
(b) plan and perform the Final Incentive Audit
using due professional care; and
(c)
obtain sufficient appropriate audit evidence by performing audit procedures to
afford a reasonable basis for the Report, verifying each individual expenditure
claimed by the Qualified Production Company.
(3) A Final Incentive Audit may commence upon
completion of a Qualified Production Company's production activities associated
with the State-Certified Production in the State of Alabama, or at any time prior
thereto.
(4) The Qualified Production
Company shall provide the CPA performing the Final Incentive Audit with the
following information:
(a) a complete chart of
accounts;
(b) a complete general
ledger;
(c) a final cost report
relating to all expenditures claimed as qualified Production
Expenditures;
(d) payroll expense
reports which identify, trace and reconcile payroll costs for each employee to a
final payroll register, identify on which payments and in what amounts with
holdings of Alabama income tax have been made and document that appropriate
corresponding payments and filings have been made to the State of
Alabama;
(e) copies of all paid
invoices and receipts relating to each expenditure claimed as a Production
Expenditure;
(f) a completed crew
list, including the last four digits of their social security numbers or other
employer identification numbers;
(g)
a completed cast list, including the last four digits of their social security
numbers or other employer identification numbers;
(h) any and all records verifying and
confirming the residency of employees;
(i) a completed vendor list, including the
amount received for goods delivered and/or services performed as well as the last
four digits of the vendors' social security numbers or other employer
identification numbers;
(j) copies of
issued W-2s and 1099s relating to all activities within the State of Alabama on
the State-Certified Production, but if the Qualified Production Company has not
issued any W-2s or 1099s prior to completion of the Final Incentive Audit, then
it shall provide other comparable documentation to verify payment;
(k) documentation or other verification that a
vendor is an Alabama-Based Company;
(l) documentation showing that any Loan-Out
Companies that received payments for services performed by their owners on the
State-Certified Production, to include a Loan-Out Affidavit for each Loan-Out
Company that received payments for services performed by their owners on the
State-Certified Production that shall be furnished to the Alabama Department of
Revenue prior to issuance of the Rebate;
(m) documentation showing that any and all
Loan-Out Companies that received payments for services performed by their owners
on the State-Certified Production have paid Alabama estimated income taxes on
behalf of their owners, and documentation shall be furnished to the Alabama
Department of Revenue prior to issuance of the Rebate;
(n) documentation showing that the Qualified
Production Company has registered to do business with the Alabama Secretary of
State; and
(o) any other
documentation needed to confirm Production Expenditures during the Final
Incentive Audit and produce the Report.
(5) The Report shall identify, on a
city-by-city and county-by-county basis, the amount of total Incentives
attributable to state sales, use, and lodgings taxes in addition to specifically
identifying the amount of the total Production Expenditures eligible for the
Rebate.
(6) The CPA performing the
Final Incentive Audit may not include a Production Expenditure on the Report
unless the Qualified Production Company has provided a receipt of payment or
other evidence that the expenditure has been paid and was Expended in
Alabama.
(7) The Qualified Production
Company shall submit the Report to both the Office and to the Department within
120 days of completion of production activities in the State of Alabama on the
State-Certified Production; provided however, that the Qualified Production
Company may request an extension of up to 45 days to submit the Report to the
Office.
(8) Failure of a Qualified
Production Company to timely submit the Report may, at the Office's discretion,
cause the Qualified Production Company to:
(a)
become liable for the state sales, use, and lodgings taxes that would otherwise
have been paid had the Incentives not been granted; and
(b) forfeit any Incentives otherwise awarded to
and/or set aside for the Qualified Production Company's Rebate.
(9) At the discretion of the
Qualified Production Company, it may provide a confidentiality agreement to the
CPA engaged to perform the Final Incentive Audit, which limits the CPA's ability
to discuss the State-Certified Production to only those designated
representatives of the Qualified Production Company and the Office.
Author: Department of Commerce/Alabama Film
Office
Statutory Authority:
Code of Ala.
1975, §§
41-7A-40 through -48.
