AZ SB1409

Repeals prior motion picture tax credit provisions (sections 43-1075 and 43-1163) and replaces them with new income tax credit structure for qualified motion picture production expenditures beginning January 1, 2011.

Allows production companies a credit of 17.5% on qualified expenditures of $250,000-$1 million and 20% on expenditures exceeding $1 million, with an additional 5% if using a certified private production facility with $50 million infrastructure investment.

Requires production companies to have at least 25% of full-time employment positions filled by Arizona residents, complete an independent audit of production costs, and meet minimum $250,000 qualified expenditure threshold to qualify.

Caps total annual preapproval of motion picture credits at $70 million statewide ($10 million reserved for infrastructure projects, $4 million for commercials and music videos), with no single production credit exceeding $15 million.

Allows excess credits to be refunded as tax refunds if they exceed income tax liability, and prohibits applications for obscene films or productions involving sexual exploitation of minors.