Production/Tax Incentives Recent Updates
April 27, 2008
April 4, 2008
March 25, 2008
February 27, 2008
January 31, 2008
January 17, 2008
January 9, 2008
November 29, 2007
November 13, 2007
October 31, 2007
ALASKA
- Senate Bill 230 has passed the House and the Senate and is awaiting transmittal to the Governor for signature. The bill creates a transferable production credit of 30% of qualifying production local spend, plus: 10% for wages paid to Alaska residents, 2% for expenditures in a rural area, and 2% for expenditures between October 1 and March 30.
FRANCE
- Added film commission and proposed incentives.
GEORGIA
- House Bill 1100 has been passed and transmitted to the Governor for signature. The Bill increases the production credit up to 30% and eliminates the current tiered credit system providing more credits based on filming location and use of resident labor. The base credit is an amount not to exceed 20% of the base investment in Georgia and the production company shall be allowed an additional tax credit not to exceed 10% of such base investment if the qualified production includes a "qualified Georgia promotion."
ILLINOIS
- Incentive expired on December 31, 2007, but an extension of the credit through December 31, 2008, in House Bill 2482 passed both the House and the Senate and is expected to be signed by the Governor. The expired statute provided a transferable tax credit of 20% of qualifying local spend (compensation not to exceed $100,000 per resident employee), plus 15% of the Illinois labor expenditures in specially designated areas, with no caps.
IOWA
- Type of Incentive: Transferable investment and expenditure tax credit (5 year carry forward)
- Maximum Benefit: 25% of qualified spend on eligible projects; and 25% of investment in registered projects
- Caps Per Project/Funding Per Year: The qualifying investors' 25% credit of the eligible spend is capped at each investor’s pro rata share of that amount up to 25% of qualified expenditures on the project
- Crewbase Considerations: In-state crew for one small feature, the balance reside out-of-state; Iowa is a right-to-work state
LOUISIANA
- Added incentive information for Jefferson Parish.
MICHIGAN
- Type of Incentive: Refundable and transferable business tax credit (or non-refundable, non-transferable income tax credit); and non-refundable, transferable infrastructure investment tax credit, (and non-refundable, non-transferable qualified job training expenditure credit for resident below-the-line crew with a 10 year carry forward)
- Maximum Benefit: 42% of qualifying direct production expenditures in "core communities" or 40% of direct production expenditures in other locations; and 30% of qualified personnel expenditures (or 50% qualified job training expenditure credit for resident below the line crew"); 25% infrastructure investment tax credit; 0.5% of each credit is deducted as an application and redemption fee payable to the "Michigan film promotion fund," reducing the benefit to 41.5%, 39.5% and 29.5% respectively for production and personnel; 49.5% for qualified job training; and 24.5% for infrastructure investment
- Caps Per Project/Funding Per Year: $2,000,000 cap per person for compensation for personal services for direct production and qualifying personnel expenditures. $20,000,000 annual cap for infrastructure investments
- Project Criteria: Minimum local spend = $50,000 for direct production and qualifying personnel credit; $100,000 for the infrastructure investment credit prior to January 1, 2009, and $250,000 after December 31, 2008
- Sunset/Review: Annual report required for the direct production and qualifying personnel credits; September 31, 2015, for the infrastructure investment credit
- Loan-Out Considerations: Income tax withholding is required on payments qualifying as "direct production expenditure" and "qualifying personnel expenditure." Section 206.351 sets forth the general withholding requirements for employers to withhold on payment to employees. Section 206.367(4) was added to permit the "eligible production company" to withhold in order to claim a credit on the expenditure.
MISSISSIPPI
- Amendments to apply if HB 1351 is signed by the Governor. The bill amends the cash rebate to provide 20% of qualifying local spend, 20% of qualifying payroll ≤ $1,000,000 paid to non-residents, and 25% of qualifying payroll ≤ $1,000,000 paid to residents. The per project cap is raised to $8,000,000, and a $20,000,000 fiscal year cap is added. There is a minimum local spend of $20,000 in base investment and/or payroll.
NEW YORK
- Type of Incentive: Refundable film production tax credit; there is also an investment tax credit for qualified film production facilities
- Maximum Benefit: 30% of qualifying production local spend, and 4% to 5% of the eligible investment credit base
- Caps Per Project/Funding Per Year: $65,000,000 in 2008, $75,000,000 in 2009, $85,000,000 in 2010, $90,000,000 in 2011 and 2012, $110,000,000 in 2013; annual allotment on first come, first served basis (if exhausted, carries over to next year’s allotment)
- Project Criteria: Qualified production costs at a qualified film production facility must ≥ 75% of such costs within and outside NY (requires at least 1 day at a qualified facility on a set); if production costs at a qualified facility < $3,000,000, then shooting days in NY outside qualified production facility must ≥ 75% of shooting days within and outside NY. The investment tax credit is available for tangible property containing at least one sound stage ≥ 7,000 SF, which is principally used as a qualified film production facility and the taxpayer provides ≥ 3 qualified services, including but not limited to: studio lighting grid, lighting and grip equipment, multi-line phone service, broadband information technology access, industrial scale electrical capacity, food services, security services, and heating, ventilation and A/C.
- Sunset/Review: December 31, 2014
April 4, 2008
MICHIGAN
- Most of the 16 bills pending in the Legislature to create a broad program of production incentives have passed and been transmitted to the Governor for signature.
- Loan Program is now available.
- Type of Incentive: Cash rebate
- Maximum Benefit: 40% of qualifying local spend (42% if in a "core community"); 30% for qualified personnel
- Caps Per Project/Funding Per Year: $2,000,000 cap per person on qualified compensation
- Project Criteria: Minimum local spend =$50,000
NEW YORK
- The Governor is expected to sign legislation that increases the New York State Production Tax Credit Program to 30%, increases the annual funding through 2011, and allows refunds to be claimed during the current tax year. Productions submitting film credit applications prior to the enactment of the enhanced film incentive, if any, will not be eligible for the enhanced film credit.
SOUTH AFRICA
- Caps Per Project/Funding Per Year: R10,000,000 per project; R300,000,000 for three years beginning in 2007
WASHINGTON
- Senate Bill 6423 has been has been enacted. The Bill is effective June 12, 2008, and eliminates the $1 million cap per project, among other changes
- Caps Per Project/Funding Per Year: $1,000,000 per project (cap per project removed on or after June 12, 2008); $3,500,000 per year
- Project Criteria:Minimum local spend = $500,000 for feature films, $300,000 for television productions, $150,000 for commercials
WEST VIRGINIA
- Type of Incentive: Transferable tax credit (with 2 year carry forward)
- Maximum Benefit: Beginning January 1, 2008, 27% of qualifying local spend and an additional 4% if 10 or more residents employed full time, for a maximum of 31%; beginning January 1, 2010, the base credit is reduced to 22%, with no change in the incremental increases for local hires, for a maximum of 26%
- Project Criteria: Minimum local spend = $25,000; note limitations if the Federal New Markets Credit is accessed
March 25, 2008
MICHIGAN
- The state has 16 bills currently pending in the legislature to create a broad program of production incentives.
NEW JERSEY
- Maximum Benefit: 20% of qualifying local spend and qualified digital media production spend
- Project Criteria: ≥ 60% of total spend (excl. post-production) must be local; local digital media content production expenses must be ≥ 2,000,000
WASHINGTON
- Senate Bill 6423 has been proposed.
WEST VIRGINIA
- The Governor is expected to sign into law Senate Bill 2215 the first week of April 2008.
- Crewbase Considerations: Crew directory available in print and online; most crew reside in the Charleston metro region with smaller bases in Huntington, Morgantown, and Wheeling
February 27, 2008
ALASKA
- Senate Bill 230 has been introduced to the legislature.
CALIFORNIA
- Assembly Bill (AB) 832 is dead, but AB 1696 is still pending.
GEORGIA
- House Bill 1100 has been introduced.
INDIANA
- Production incentives information now available.
IRELAND
- Caps Per Project/Funding Per Year: Capped at 80% of global spend up to €50,000,000 (subject to EU approval)
MONTANA
- Crewbase Considerations: Montana has 300 freelance crew members in almost every physical production job category, as well as a full service grip and electric rental house
SINGAPORE
- Production incentives information now available.
SOUTH AFRICA
- Project Criteria: Minimum QSAPE = R$12,000,000; for productions with QSAPE of R12,000,000 to R99,999,999 ≥ 50% of principal photography for a minimum of 4 weeks must be local; for productions with QSAPE ≥ R100,000,000 principal photography and shooting requirements may be waived
- Sunset/Review: December 31, 2013
SOUTH CAROLINA
- Loan-Out Considerations: Loan-out companies must be approved and certified by the South Carolina Department of Revenue prior to commencement of filming and make an irrevocable assignment of the rebate to the production company; loan-out companies must be subject to South Carolina withholding; loan-out corporations are subject to a 2% withholding rate
- Crewbase Considerations: South Carolina Has a crew base of 1 & 1/2 crew; SC and NC are covered under the same IA, and crewmembers from either state work under a stipend agreement; South Carolina is a right-to-work state
WISCONSIN
- Maximum Benefit: 25% of qualifying local spend (each resident's qualifying wages is capped at $25,000 and the two highest paid employees' wages are excluded for the resident employee payroll credit); non-resident wages qualify for the refundable production expenditure credit provided that they: (1) meet the statutory definition of production expenditures, which does NOT include talent and marketing, (2) are for services provided directly to an accredited production in the state, and (3) are paid by an entity other than claimant, such as a payroll service company
January 31, 2008
CALIFORNIA
- Assembly Bill 832 has been introduced
FIJI
- Film Commission information updated
ILLINOIS
- Loan-Out Company Considerations: Currently none to note
- Crewbase Considerations: Large crewbase mainly in Chicago area
MONTANA
- Maximum Benefit: 14% of residents' wages (up to $50,000 each); 9% of qualifying local spend
- Loan-Out Company Considerations: Qualified expenditures may include compensation paid to loan-outs, but (1) the loan-out (LLC, C or S-corp, or Partnership) must be incorporated or organized under the laws of Montana; and (2) the individual who owns/operates the loan-out must be a Montana resident
NEBRASKA
- Legislative Bill 235 has been introduced
NEW YORK
- The Governor recently announced new legislation to increase the New York State Production Tax Credit Program to 15% and broaden the definition of qualified local spend. Productions submitting film credit applications prior to the enactment of the enhanced film incentive, if any, will not be eligible for the enhanced film credit.
NEW ZEALAND
- Film Commission information updated
OKLAHOMA
- Loan-Out Company Considerations: "Crew" means any person who works on preproduction, principal photography, and postproduction, with the exception of producers, principal cast, screenwriters, and the director. The qualifying salary of producers, principal cast, screenwriters, and the director, also known as "above-the-line personnel," may be included as crew if the salaries are paid to loan-out corporations and limited liability companies registered to do business in the State of Oklahoma or the salaries are paid to Oklahoma-based above-the-line personnel. The qualifying salary of above-the-line personnel shall not comprise more than twenty-five percent (25%) of total expenditures as defined in the law. For purposes of this paragraph, "Oklahoma-based" means a company or individual with an Oklahoma income tax or corporate tax liability.
OREGON
- Crewbase Considerations: 3 deep statewide; crew directories available
UNITED KINGDOM (UK)
- Film Commission information updated
WASHINGTON
- Crewbase Considerations: 3 deep statewide; crew directories available
January 17, 2008
WISCONSIN
- Type of Incentive: Refundable production expenditure credit and non-refundable resident employee payroll credit (with 15 year carry forward)
- Maximum Benefit: 25% of qualifying local spend (each resident's qualifying wages is capped at $25,000 and the two highest paid employees' wages are excluded for the resident employee payroll credit)
- Project Criteria: Minimum local spend for productions ≥ 30 minutes = $100,000 (for productions < 30 minutes = $50,000) aggregate compensation within 12 months of the start of principal photography
January 9, 2008
- Added incentive information for ALABAMA, ALASKA, DELAWARE, INDIANA, NEBRASKA, NEVADA, NEW HAMPSHIRE, and NORTH DAKOTA.
- Added "Crewbase Considerations" and "Loan-Out Considerations" sections to U.S. jurisdictions.
- Added "Loan Program" and "Application Information" sections to applicable jurisdictions.
ARIZONA
- Caps Per Project/Funding Per Year: $7,000,000 per project in 2008, $8,000,000 per project in 2009, and $9,000,000 per project in 2010; $50,000,000 total funding for 2008, $60,000,000 total funding for 2009, and $70,000,000 total funding for 2010, 5% of the total is reserved for use with respect to commercial advertisement and music video production
- Project Criteria: Minimum local spend = $250,000 in 24 months; 50% of full-time employees = residents in 2008-2010
AUSTRALIA
- Type of Incentive: Location and Visual (PDV) offsets and Producer offset (for "qualifying Australia film")
- Maximum Benefit: 15% of qualifying local spend (QAPE), including post/digital/VFX work for Location and Visual offsets; 40% for qualifying feature films and 20% for qualifying television productions/documentaries for Producer offset
- Project Criteria: For Location offset, if QAPE = A$15,000,000 but < A$50,000,000, it must be ≥ 70% of total spend; if QAPE ≥ A$50,000,000, no percentage test; TV series must average ≥ A$1,000,000 per hour; for Visual offset, minimum qualifying PDV spend = A$5,000,000. For Producer offset minimum spend = $1,000,000 for feature films, TV series and telemovies (lower spend test for documentaries and short form animation) and production must pass "Australianness test" (subjective), official co-productions automatically qualify.
FLORIDA
- Caps Per Project/Funding Per Year: $8,000,000 per general production project; $93,750 per independent Florida filmmaker project; $1,000,000 per digital media project; $25,000,000 annual fund with 85% appropriated for general projects (zero available as of October 1, 2007 but funding may be available if certified projects are not completed) and 5% appropriated to independent Florida filmmaker projects and 10% appropriated to digital media projects; first come, first served on a fiscal year basis; productions can cross fiscal years; unused funds carry over to next year through June 30, 2009
ILLINOIS
- Incentive expired on December 31, 2007, but new legislation may extend the film incentive program to December 31, 2008.
LOUISIANA
- Type of Incentive: Transferable investor tax credits and infrastructure tax credit
- Caps Per Project/Funding Per Year: Infrastructure credit is capped at $25,000,000 per project, with special rules for earning and structuring the credit; no caps for the investor tax credits
- Sunset/Review: The investor tax credits are not time limited; the infrastructure investment tax credit expires December 31, 2008; the investor tax credit rate decreases to 20% for projects approved after June 2010, and to 15% for those approved after June 2012
MISSOURI
- Type of Incentive: Transferable tax credit; 5 year carry forward from year incurred
- Maximum Benefit: 35% of qualifying local spend, excluding compensation > $1,000,000 paid to any person
- Sunset/Review: November 28, 2013 (unless reauthorized)
NEW JERSEY
- Caps Per Project/Funding Per Year: Cannot reduce tax liability by > 50%; $10,000,000 per year
- Project Criteria: ≥ 60% of total spend (excluding post-production) must be local
NEW ZEALAND
- Eligible Entities: A New Zealand resident company; or a foreign corporation operating with a fixed establishment in New Zealand for the purposes of lodging an income tax return (both when it lodges the Grant application and when the Grant is paid)
- Sunset/Review: Review scheduled for 2011
TENNESSEE
- Caps Per Project/Funding Per Year: Compensation for above-the-line personnel capped at $100,000 per function; cap on additional 2% rebate for qualifying music expenses of $100,000; funded by gifts, grants, donations and appropriations by the General Assembly, with approximately $19,000,000 available on December 21, 2007
TEXAS
- Caps Per Project/Funding Per Year: $2,000,000 for a film, $2,500,000 for a television program, $200,000 for a commercial or series of commercials, and $250,000 for a digital interactive media production. $11,000,000 annual fiscal year funding on September 1, with a contingency rider to supplement in $5,000,000 increments as needed
SOUTH AFRICA
- Caps Per Project/Funding Per Year: R10,000,000 per project; R176,000,000 for 2007-2008 (February 21, 2007, Budget Speech allocates R300,000,000 to film making)
TRINIDAD & TOBAGO
- Sunset/Review: Fiscal year review
November 29, 2007
- Added OHIO incentive information.
FIJI
- Eligible Entities: Any film company
MARYLAND
- Caps Per Project/Funding Per Year: No per project cap; $4 million program budget for 2007-2008 fiscal year (all funds currently allocated for 2007-2008 fiscal year)
MISSOURI
- Funding changes are now effective, as of November 28, 2007.
SOUTH CAROLINA
- Caps Per Project/Funding Per Year: No project caps; annual funding of $10,000,000 (about $7 million available as of November 29, 2007) for wage rebate and 26% of admissions tax collected for previous year for the supplier rebate, approximately $5,500,000 for fiscal year 2007-2008 (about $4 million available as of November 29, 2007)
November 13, 2007
- Added SOUTH DAKOTA and VERMONT incentive information.
- Added "Sales and Use" and "Hotel Occupancy" tax exemption information (if applicable) to the remaining states, New York through Wyoming.
October 31, 2007
- Added ARKANSAS, IDAHO, KENTUCKY, and VIRGINIA incentive information.
- Added "Sales and Use" and "Hotel Occupancy" tax exemption information (if applicable) to states alphabetically, Arizona through New York. Check back soon for information on remaining states.
- Added Film Commission information for all available states and countries.
DISTRICT of COLUMBIA
- Sunset/Review: Annual review on or before December 31st of each year, for the fiscal year concluding September 30th
GEORGIA
- Maximum Benefit: Tax credit = 9% of the "base investment" (exclude the portion of a salary > $500,000 from aggregate payroll) plus 3% of base investment if such base investment is in a tier 1 or tier 2 county plus 2% of base investment if such base investment > $20 million in state and an additional tax credit = 3% of total aggregate payroll of Georgia residents
NEW YORK
- Project Criteria: Qualified production costs at a qualified film production facility must ≥ 75% of such costs within and outside NY (requires at least 1 day at a qualified facility on a set); if production costs at a qualified facility < $3,000,000, then shooting days in NY outside qualified production facility must ≥ 75% of shooting days within and outside NY. The investment tax credit is available for tangible property containing at least one sound stage ≥ 7,000 SF, which is principally used as a qualified film production facility and the taxpayer provides ≥ 3 qualified services, including but not limited to: studio lighting grid, lighting and grip equipment, multi-line phone service, broadband information technology access, industrial scale electrical capacity, food services, security services, and heating, ventilation, and A/C
OREGON
- Type of Incentive: Cash rebates consisting of the Oregon Production Investment Fund (OPIF) and the Greenlight Oregon Labor Rebate (GOLR)
- Maximum Benefit: Up to 16.2% of wages paid (residents and non-residents and exclude entire compensation if Oregon compensation > $1,000,000 for each individual); 20% of qualifying local goods/services (other than wages)
- Caps Per Project/Funding Per Year: No per project cap; $5,000,000 ($3,000,000+ available as of October 4, 2007) annual funding cap for the OPIF (10% labor and 20% local goods/services rebate); no annual funding cap for 6.2% GOLR
- Project Criteria: Minimum local spend =$750,000 for OPIF; minimum local spend = $1,000,000 for GOLR
PENNSYLVANIA
- Maximum Benefit: The credit is 25% of qualifying local spend (excluding payments > $15,000,000 for services provided by performing artists)
- Project Criteria: Minimum local spend = 60% of the budget
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