Nev. Admin. Code § 360.855

Current through December 12, 2024
Section 360.855 - Calculation of amount of transferable tax credits: Qualified expenditures and production costs eligible to serve as basis for calculation
1. For the purpose of calculating the amount of transferable tax credits available to an eligible production company pursuant to NRS 360.7591 to 360.7594, inclusive, except as otherwise provided in subsection 3, qualified expenditures and production costs that may serve as a basis for transferable tax credits must:
(a) Be expenditures made during the qualified production period;
(b) Be customary and reasonable;
(c) Relate to a category of qualified expenditures and costs listed in subsection 2; and
(d) Be:
(1) Purchases or rentals of tangible personal property or services from a Nevada business.
(2) The payroll for Nevada residents or other personnel who provided services in this State, as calculated pursuant to NAC 360.860 and included in the calculation of the amount of transferable tax credits in accordance with NRS 360.7591 to 360.7594, inclusive.
(3) Fees paid to a producer, as included in the calculation of the amount of transferable tax credits in accordance with subsection 3 of NRS 360.7594.
2. Except as otherwise provided in this section and NRS 360.7591, expenditures or costs may serve as a basis for calculating the amount of transferable tax credits issued pursuant to NRS 360.759 only if the expenditure or cost relates to:
(a) Set construction and operation.
(b) Wardrobe and makeup.
(c) Photography, sound and lighting.
(d) Filming, film processing and film editing.
(e) The rental or leasing of facilities, equipment and vehicles.
(f) Food and lodging expenses that are incurred in this State, including, without limitation, per diems for food, lodging and incidental expenses.
(g) Editing, sound mixing, special effects, visual effects and other postproduction services.
(h) The design, construction, improvement or repair of property, infrastructure, equipment or a production or postproduction facility.
(i) State and local government taxes to the extent not included as part of another cost or expenditure included in the calculation of the amount of transferable tax credits pursuant to this section and NRS 360.7591 to 360.7594, inclusive.
(j) Commercial airfare if the airfare is for travel to or from the State, purchased through a Nevada travel agency or Nevada travel agent and directly attributable to the qualified production.
(k) Insurance coverage, if purchased through a Nevada insurance agency or broker.
(l) The design and development of art assets for interactive entertainment, including, without limitation, concept art, background art, character models and sprites.
(m) The programming of software related to interactive entertainment, including, without limitation, codebases, netcode, development and modification of source code, development and adaptation of game engine software and game development tools.
(n) Quality assurance for interactive entertainment, including, without limitation, testing and tracking software bugs.
(o) Motion capture for interactive entertainment, including, without limitation, costs for motion capture software, performers and participants and motion capture facilities and costs related to incorporating motion capture data into an interactive entertainment product.
(p) Any other direct costs of producing a qualified production, including preproduction and postproduction, in accordance with generally accepted industry practice.
3. Expenditures and costs are not qualified direct production expenditures and must not be included in the calculation of the amount of transferable tax credits pursuant to this section and NRS 360.7591 to 360.7594, inclusive, if:
(a) Pursuant to NRS 360.7591 to 360.7594, inclusive, and NAC 360.800 to 360.865, inclusive, and sections 2 and 3, the expenditure or cost is not eligible to serve as a basis for transferable tax credits issued pursuant to NRS 360.759;
(b) Pursuant to paragraph (d) of subsection 2 of NRS 360.7591, the Office determines that the expenditure or cost provides a pass-through benefit to a person who is not a Nevada resident;
(c) The expenditure is made or the cost is incurred more than 90 days before the date that the application for a certificate of eligibility was submitted to the Office; or
(d) The expenditure or cost is for any of the following:
(1) Airline fees, including, without limitation, baggage fees, change fees or any other airline fee determined by the Office to not be a qualified direct production expenditure;
(2) Box or kit rental fees paid to a person who is not Nevada resident;
(3) Any penalty associated with an infraction of the law, including, without limitation, parking tickets, speeding tickets or legal fees;
(4) Publicity; or
(5) Bank fees and expenses.
4. As used in this section:
(a) "Box or kit rental fee" means a payment made by a production company to a person employed to work on a qualified production for the approved and authorized use of reusable equipment that is owned by the person.
(b) "Nevada travel agency" means a Nevada business whose primary business function is to offer the service of booking travel.
(c) "Nevada travel agent" means a person who is a Nevada resident who is primarily in the business of offering the service of booking travel.
(d) "Qualified production period" means the period during which the preproduction, production and postproduction occurs on a qualified production, as set forth on the application for a certificate of eligibility.

Nev. Admin. Code § 360.855

Added to NAC by Office of Economic Dev. by R120-13, eff. 12-23-2013; A by R062-22A, eff. 2/13/2023

NRS 360.759, 360.7591