EMPOWER. PROMOTE. MENTOR.State Film Tax Incentives
2022It’s expensive to make a film, so why not make the most of film incentives? Incentives will allow you to save money on taxes, receive discounts on local goods, and even get cashback from the state. Many states have an incentive of some kind to encourage you to shoot your film within them. However, applying for a film tax credit can be complicated, especially since every state has different rules and regulations to follow.
What are Tax Incentives?
Film incentives started in the 1990s as a response to production companies choosing to shoot American films abroad. A tax incentive can incentivize a particular economic activity, and there are financial benefits to encouraging filmmakers to shoot within your state. For example, local job creation, spending on local businesses such as hotels, and increased tourism.
Producers need to weigh up the costs and benefits of shooting locally versus filming in another state or even filming abroad. Film incentives play a significant role in the decision of where to shoot a film. Below you will find a list of all of the states with incentives, a link to the application website, and a breakdown of tax credit details. All of the state incentives below run at least until the end of 2021.
TENNESSEE
Incentive Type: Grant
Website: Tennessee Entertainment
Minimum Spend: $200,000
Incentive Cap: $13,000,000
Terms 25% for all residents, terms apply
Contact Info: (615) 741-3456
Description
All the above, and below-the-line residents qualify for the grant. However, a scripted TV show must spend at least $500,000 per episode. After principal photography production, companies must also post a notice in local newspapers where the filming took place, telling the public of the need to file creditor claims.
Qualified expenditures include production costs that are incurred in Tennessee during pre-production, principal photography, and post-production. This includes payments for goods and services used in the state in connection with a qualified production that has been either purchased from a Tennessee vendor or paid to a Tennessee resident. Eligible spend, with regard to wages, is limited to the first $250,000 in wages, salaries, fees, per diem, and fringe benefits paid to a Tennessee resident. Any expenditure incurred before the “Effective Date” is contractually assigned and fully executed will not qualify.
ALABAMA
Incentive Type: Non Transferable Refundable Tax Credit
Website: Alabama Film
Minimum Spend: $500,000
Incentive Cap: $20,000,000
Terms 35% to local residents, 25% to non-residents
Description
Both above and below-the-line, resident workers earn a 35% tax incentive. While all other qualified workers and expenditure earn 25%. The production must spend at least $150,000 within 12 months. Qualified spending includes pre-production, production, and post-production costs.
This program is administered on a case-by-case basis. The film office retains the sole discretion to determine which projects are selected and the number of incentives available to each selected project. While there is not a per-project incentive cap per se, Alabama only awards the incentive on the first $20 million of qualifying production expenditures. Subject to the $20 million limitations, all payroll paid to Alabama residents earn 35%, while all other qualified production expenditures earn 25%, including the first $500,000 of each nonresident below-the-line (direct hire or loan out) and the first $1 million of each nonresident above-the-line (direct hire or loan out). There is a state funding cap of $20 million per fiscal year (Oct. 1 – Sept. 30). A certified production spending at least $150,000 within a 12-month period may apply to be exempted from the state portion but not the local portion of sales, use, and lodging taxes. The sales tax exemption is not available on qualified expenditures in excess of the first $20 million.
ARKANSAS
Incentive Type: Rebate
Website: Arkansas Production
Minimum Spend: $200,000
Project Cap: None
Annual Incentive Cap: $4,000,000
Terms 30% below-the-line residents, 20% to all other staff
Contact: 501-682-7676
Description
Below-the-line, residents receive 30%, while all other staff earns 20%, including above-the-line residents. The production must spend at least $200,000 within 6 months, or $50,000 for post-production projects.
For tax rebates in Arkansas, qualified expenditures include any costs incurred for development, pre-production, production, or post-production of qualified production. Eligible types of production include animation, documentaries, feature films, pilots, video games, and scripted television. Reality tv, talk shows, game shows, and commercials are not eligible for any film tax rebate.