Ala. Admin. Code r. 281-3-1-.06

Current through Register Vol. 43, No. 1, October 31, 2024

Section 281-3-1-.06 - Final Incentive Audit And The Report

(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.

Ala. Admin. Code r. 281-3-1-.06

New Rule: Filed August 13, 2012; effective September 17, 2012.

Amended by Alabama Administrative Monthly Volume XXXIII, Issue No. 05, February 27, 2015, eff. 3/19/2015.

Author: Department of Commerce/Alabama Film Office

Statutory Authority:Code of Ala. 1975, §§ 41-7A-40 through -48.