Posted 16 July, 2009 in FilmUSA
SECTION 181 FEDERAL INCENTIVE INFORMATION – COURTESY OF THE DIRECTORS GUILD OF AMERICA:
LINK TO INFORMATION ON SECTION 181 FEDERAL INCENTIVE
—————————————————————
MOTION PICTURE ASSOCIATION OF AMERICA, INC.
2010 STATE-BY-STATE TAX INCENTIVES FOR THE FILM INDUSTRY
MOTION PICTURE ASSOCIATION OF AMERICA, INC.
2010 STATE-BY-STATE TAX INCENTIVES
FOR THE FILM INDUSTRY
Compiled by Angela Miele
Vice President, State Tax Policy
amiele@mpaa.org
908-668-9912
STATE TAX INCENTIVES March 29, 2010
Alabama: Effective 1/1/09 a 25% refundable tax credit/rebate for a variety of productions from film and TV to videos, interactive games, digital media, interactive websites, etc if the in-state spend is at least $500,000, but not more than $10 million. A single episode in a television series would be considered a single production project. If there is a minimum spend of $150,000, there is lodging tax exemption and a sales and use tax exemption for the purchase of production related items. The new law also provides a 35% rebate for wages paid to Alabama residents. There is a separate credit eligibility requirement for sound tracks as long as the in-state expenditures are at least $50,000 and no more than $300,000. The credits/rebates are capped in fiscal years ending September 30 at $5 million for 2009, $7.5 million for 2010, $10 million for 2011 and beyond.
Alaska: A transferable tax credit equal to 30% of in-state qualified production expenditures (including payroll for services performed in Alaska) for film, television, video and commercial productions. An additional 10% credit for hiring Alaska residents, an additional 2% credit for expenditures made in a rural area and a 2% credit for productions made between October 1-March 30. Minimum in-state spend of $100,000 The aggregate amount of tax credits may not exceed $100 million. No state sales tax. No state individual income tax.
Arizona: Transferable production and infrastructure tax credits of 30% over $1MM in-state spend and 20% for in-state spend of $250,000 – $1MM. and a capped at $9 million per project sunsets 12/31/2010. Must hire 50% residents for project eligibility.
Arkansas: Effective April, 2009: A 15% rebate on all production expenditures if there is a minimum in-state spend of $50,000 in a 6-month period. Eligible productions include: films, TV, digital media, trailers, videos, commercials and interactive games. Also includes an additional 10% rebate for in-state below the line wages, no rebate on wages of $500,000 and above and no per production cap. The program funding is subject to appropriation ($5 million expected in 2009).
California: Beginning 7/1/2009: 20% Tax Credit for a qualified motion picture which includes Feature Films ($1 million minimum – $75 million maximum production budget) MOWs or miniseries ($500,000 min. prod. budget) New television series licensed for original distribution on basic cable ($1 million min. bud; 1/2 hour shows and other exclusions apply). A 25% Tax Credit for a qualified TV series, without regard to episode length, that filmed all of its prior season or seasons outside of California.
An independent film ($1 MM?$10 MM budget that is produced by a company that is not publicly traded and that publicly traded companies do not own more than 25% of the producing company.)
Eligibility Requirements: satisfy above criteria and meet the following conditions: 75% test (production days or total production budget) in CA, Principal photography must commence no later than 180 days after application approval; Postproduction completed within 30 months of receiving tax credit application approval.
No sales or use tax on production or postproduction services on a motion picture or TV film. Such industry specific services include writing, acting, directing, casting and storyboarding. A partial (5%) sales tax exemption on the purchase or lease of postproduction equipment by qualified persons.
No sales and use tax on 45% of the charges for sets, including labor to design, construct and strike and no sales tax on the full charge for the rental of personal property. No state hotel tax on occupancy, however, cities or counties that impose a local tax have a tax exemption for occupancies in excess of 30 days.
Colorado: A 10% refund: For a production company that originates the film production in Colorado the 10% refund if the in-state below-the-line expenditures equal or exceed $100,000; For a production company not originating the film production activities in Colorado the 10% refund if in-state expenditures equal or exceed $1 million. Must spend at least 75% of its production expenditures in state and 75% of the actors and crew must be Colorado residents. Annual statewide cap is $500,000 for 2006-07 and increases with inflation in subsequent years. No sales and use tax on film company services if, in fact, the company is providing a service and not tangible personal property. No hotel Occupancy tax for hotel stays in excess of 30 days.
Connecticut: Provides a tiered incentive based on in-state spend up to a maximum of 30% transferable production tax credit on expenditures related to film, TV and digital media. The credit for compensation paid is capped at the first $15 million. Production credits may be carried forward for 3 years. Beginning 1/1/09, only 50% of expenses or costs will be allowed when incurred outside the state and used within the state.
No hotel occupancy tax for hotel stays in excess of 30 days.
Delaware: No state sales tax.
Florida: Sales and use tax exemption for the purchase or lease of motion picture, video or other equipment (depreciable equipment with a useful life of at least three years) if used exclusively as an integral part of production activities in the preparation of motion pictures, tapes, TV or productions produced for commercial use or sale. If equipment and personnel used belong to the producer of a qualified motion picture, no tax on fabrication labor Subject to annual appropriation. Rebate program on in-state expenditures. There are 4 queues; 1) Films, TV, commercials music videos, expenditures in excess of $650,000 get a15-22% rebate, 2) multiple commercials/ music videos minimum combined expenditures of $500,000 and a $100,000 per project minimum get 15-20% rebate, 3) Indies spending $100,000-$625,000 get 15%-17% rebate, 4) Digital media projects -10% rebate. No state individual income tax.
Georgia: Sales and use tax exemption for the purchase or lease of a wide range of production and postproduction equipment and services for use in qualified production activities in the state. Transferable income tax credit equal to 20% of all in-state costs for in-state film and TV investments of $500,000 or more. Additional 10% credit if the production agrees to include a “qualified Georgia promotion”
Hawaii: A refundable income tax credit of 15% (for production in counties with a population greater than 700,000) or 20% (for production in counties with a population equal to or less than 700,000), which is deductible from net income tax liability, of the costs incurred in the state in the production of motion picture and television films, and up to 7.25% rebate for the for transient accommodation tax (hotel room tax). Must spend at least $200,000 in Hawaii. Overall cap of $8M. Repealed on 1/1/2016.
Idaho: Idaho provides for a rebate of the 6% sales tax on tangible personal property when $200,000 is spent on a wide variety of qualifying expenses. 20 percent rebate for qualifying productions on all goods and services purchased in Idaho if at least $200,000 is spent in the state and at least 20% of residents make up crew (no funding to date for this program). No hotel occupancy tax on hotel stays of 30 days or longer.
Illinois: A transferable 30% income tax credit for Illinois production expenditures including in-state wages ($100,000 minimum spend for productions 30 minutes or longer), plus a 15% credit for Illinois labor expenditures for residents from impoverished areas; payroll expenditures are capped at the first $100,000 in wages for each employee.
Sales and use tax exemption for products of photo processing produced for use in motion pictures for public commercial exhibition. The 14.9% hotel tax is reimbursed for stays in excess of 30 days.
Indiana: A refundable tax credit equal to 15% of qualified production expenditures with in-state spend greater than $100,000 for films or TV productions less than $6 million. Refundable tax credit up to 15% of qualified production expenditures if in-state spend of $6 million or more and the total annual state cap on these productions will be $2.5 million. Also provides a sales tax exemption for the purchase of motion picture production property but a tax credit and a sales tax exemption may not be claimed for the same property. Includes an apportionment of media income associated with the in-state production. No hotel tax on stays of 30 days or longer.
Iowa: The Iowa incentive program was temporarily suspended
Kansas: A credit equal to 30% of in-state production and postproduction related expenditures including wages, fringes, and payments to personal services corporations under certain conditions. Minimum in-state spend of $100,000 for productions over 30 minutes. Credits are capped at $2 million annually. No hotel tax on stays of 28 days or longer.
Kentucky: Beginning 2009, 20% refundable tax credit for production and post production related expenditures including payroll with a minimum in-state spend of $500,000. Includes a provision requiring script review for appropriate content. As an alternative, productions can take a sales and use tax refund for purchases made by a motion picture production company in connection with filming in Kentucky if the company films or produces one or more motion pictures in the state during any 12-month period.
Louisiana: Provides a transferable investor tax credit equal to 30% of the in-state investment made if it is in excess of $300,000. The transferable employment tax credit is equal to 5% of the salaries in-state residents hired (no salaries in excess of $1million will qualify). (New program includes an alternative option to transfer credits through the Governor’s Office.)
Maine: A wage rebate equal to 10% of non-Maine residents’ wages and 12% of Maine residents’ wages on qualified productions. Income tax offset for companies investing in Maine productions.
Sales and use tax exemption for tangible personal property and services used primarily in production. Revenue Department Ruling in 2004 proclaimed film production a manufacturing process. Hotel occupancy taxes are rebated after 28 consecutive days.
Maryland: State sales and use tax exemption for the purchase or lease of production or postproduction equipment, services, supplies, props and sets used in the production of motion picture, television, video, commercials and corporate films. No state sales tax for hotel stays in excess of 30 days. Subject to additional appropriation, wage rebate program, up to $12,500 per eligible employee for film and television production activity in the state if in-state spending exceeds $500,000. The state rebate cap varies each year.
Massachusetts: A choice of a transferable employment credit (or refundable credit equal to 90% of the credit value), equal to 25% of Massachusetts sourced income. The incentive also includes a film production tax credit (FPTC) equal to 25% of in-Commonwealth production costs (not including payroll expenses used to claim the payroll credit) if 50% of the total production costs or 50% of principal photography days occur in the Commonwealth. There is a minimum in-Commonwealth spending requirement of $50,000 in order to qualify for all the production incentives and the payroll and FPTC include a five-year carry forward provision.
Michigan: A refundable credit equal to 40% (42% in “core community areas”) for in-state expenditures (a required in-state spend minimum of $50,000) including above the line talent both in-state and out of state. There is a credit equal to 30% for payroll expenditures related to below the line, out of state talent. The compensation eligible for the credit is capped at $2 MM. Free use of state–owned facilities, properties and resources. Job training credits and loan assistance programs available.
Mississippi: A rebate program for a $20,000 minimum in-state spend provides rebates equal to 20% for in-state investments (excluding payroll). A separate 25% rebate for the employment of in-state residents and a 20% rebate on non-residents in connection with the qualified production (up to and including the first $1 million), withholding must be made on all eligible payroll. The per project rebate is capped at $8 million and the annual amount of available rebates is capped at $20 million per fiscal year. Also includes a 7% sales tax exemption for the purchase of certain expenditures and a partial sales tax exemption (1.5%) for the purchase or rental of machinery and equipment. Sunset July 1, 2012.
Missouri: Provides a transferable/carry forward (5yrs) income tax credit up to 35% of expenditures in the State. Productions must spend a minimum of $100,000 for features and productions in excess of 30 minutes and $50,000 for productions less than 30 minutes. No credit on compensation in excess of $1 million.
$4.5 million/year available for total credits. No sales tax on hotel stays after 31 days.
Montana: Film and TV productions eligible for a 14% refundable tax credit on up to $50,000 in wages paid to Montana residents. Also a refundable tax credit of 9 percent on their total qualified expenditures in the state. No state sales tax. No business equipment tax on motion picture related vehicles and equipment brought into the state for the first 180 days. State 7% accommodations tax rebate for stays in excess of 30 days. Credits may also be carried forward for 4 years.
Nevada: No corporate or individual Income tax. Low hotel room tax.
New Hampshire: No state sales tax. Individual Income tax on interest and dividends only.
New Jersey: Includes a transferable tax credit equal to 20% of in-state production related expenses for films, TV shows, series and digital media productions. Additionally, sixty percent of the total production expenses, excluding post-production costs, must be incurred in the state. The film/TV and video program is capped at $10 million per fiscal year digital media is capped at $5 million per year and includes a roll-over provision. If the funds are exhausted in any fiscal year, any remaining qualified taxpayers will be first to receive the credit in the subsequent fiscal year. Sales tax exemption for all film and video and digital media related machinery and equipment as well as services of installing, repairing and maintaining the equipment, used directly in production and post production of motion pictures, television or commercials.
New Mexico: State sales tax exemption on all production costs including set construction, wardrobe, facility and equipment rental, all production and postproduction services. A 25% refundable income tax credit on in-state film production and postproduction expenditures. Also, guaranteed investments may be considered for up to 100% of the estimated production costs, capped at $15 million per project. Loan structures would have to be “fully and unconditionally guaranteed” by an entity with an investment grade bond rating; and equity structures require presales/distribution. After 30 days, the 4% lodgers’ tax is waived for hotel guests.
New York: Comprehensive State, New York City and local sales and use tax exemption for machinery, equipment and services used in production and postproduction activities in the production of feature length films, television programs, music videos and commercials. Film and television and commercial productions receive tax exemptions whether they are produced and delivered electronically or in tangible form. A 30% corporate/partnership/individual refundable income tax credit for film and television productions for below-the-line in-state expenses including postproduction (and actors with non-speaking roles) if 75% of the aggregate sound stage work (excluding postproduction) is performed in a NY production facility at least 7,000 square feet. If less than $3 million (excluding postproduction) is attributed to the production facility related costs, then 75% of the aggregate shooting days outside of the facility must be in NY in order for NY location costs to qualify for the credit. The annual cap is a rolling cap; if the cap is exhausted in one year the projects will be eligible in the following year on a first-come first-served basis. An additional 5% refundable tax credit against corporate, partnership, or unincorporated business tax liability against New York City tax liability with the same qualification parameters as the state credit. NYC also offers a discount card to productions for the length of their New York City shoots. It provides a minimum 10% discount and other special offers at over 550 local vendors ranging from production services, hotels, car rentals, parking, cultural institutions, banking services and more.
North Carolina: Refundable income tax credit equal to 25% (effective 1/1/2010) of qualifying production expenses for in-state leased or purchased items, must have qualifying in-state expenses of at least $250,000. Limitations: per feature credit cap of $7.5 million and assets purchased in excess of $25,000, qualifying expense limited to the purchase price less the fair market value of the asset at the completion of the production. Wages up to the first $1 million (withholding must be made) included. Sales and use tax (1%) rate, on the purchase and rentals to motion picture production firms of cameras, films, set construction materials, as well as chemicals and equipment used to develop and edit film that is used to produce release prints.
Ohio: Beginning 7/1/2009 refundable production tax credit program including film, TV, video and digital media equal to 25% of production expenditures (with a minimum in-state spend of $300,000) including out of state wages. There is a separate 35% refundable credit for wages paid to Ohio residents. Also includes a per production cap of $5 million and an annual cap on available credits of $10 million in year one and $20 million in year two with a sunset of 6/30/2011. No state sales tax on hotel stays in excess of 30 days
Oklahoma: Oklahoma Film Enhancement Rebate now funded up to $5 million per year. Provides a rebate of up to a maximum of 37% of Oklahoma production expenditures for films/ TV/Commercials filming in the state. Must employ residents for at least 50% of B-T-L crew to qualify for full rebate. Rebates vary depending on the percentage of Oklahoma residents employed in the productions. Crew tiers are waived for $5 million in-state spend. Production company must provide evidence of a completion bond and evidence of a recognizable domestic or foreign distribution agreement within one (1) year from the end of principal photography. The rebate cannot be used in conjunction with the sales tax exemption.
Sales tax exemption on sales of tangible, personal property or services to a motion picture or television production company to be used or consumed in connection with a feature or television production. State sales tax rebate on hotel stays after 30 days.
Oregon: The incentive program provides a rebate of 20% of Oregon-based goods and services, and an additional cash payment of up to 16.2% of wages paid to production personnel. Minimum $1 million spending to qualify for rebate on production expenditures in Oregon. The annual cap on rebates is $7.5 million per fiscal year (July). No state sales tax. Lodging taxes waived for rooms held longer than 30 days. Other local incentives including parking rebates up to $1,000 of parking fees incurred within Multnomah County (Portland area) for every 100-hotel room nights purchased.
Pennsylvania: A 25% transferable production tax credit for expenses incurred in PA. Available for feature films, TV shows and series, and commercials intended for a national audience. Must have 60 percent of the total production expenses incurred in Pennsylvania. No hotel tax for stays in excess of 30 days or more. No more than $42 million in FY 09-10 (and $60 million in 2010-2011) year in credits can be awarded.
Puerto Rico: Provides Up to a 40% investment tax credit is available for motion picture and television expenditures paid to Puerto Rico Businesses or below the line talent if at least 50% principal photography is in Puerto Rico. The credit is available for projects first approved by the Film Commission once applicants pay ¼ of 1% of the film’s budget for a license. Local investors will partner with non-Puerto Rican based companies to help them access the investment tax credit.
Rhode Island:Provides a 25% motion picture transferable tax credit for all Rhode Island production related expenditures with a $15 million annual cap on the total credits approved. This also includes salaries for people working on the ground, in R.I. The film/TV/commercials/ video game production must be filmed primarily in the state of Rhode Island and have a minimum budget of $300,000.
Additionally, there is also a non-transferable investor tax credit for Rhode Island residents who invest in film/TV/commercials or video games filmed primarily in Rhode Island. The investor will receive a 15% tax credit (with a 3 year carryforward) for a production with a budget of $300,000-$5million. If the investment is in a production with a budget over $5million, it is a 25% tax credit (with a 3 year carryforward).
South Carolina: Provides a maximum of 20% rebate for total aggregate in-state payroll for persons (crew, actors, extras) subject to SC income tax withholding (excludes individual salaries of $1 million or more) this is capped at $10 Million per year (10% rebate up to $3,500 for out of state payroll) (must spend $1 million in-state to qualify). Also provides up to a 30% rebate for purchases/rentals of certain in-state goods and services. If you spend $250,000 in-state: available sales and use tax exemption for the purchase of equipment and supplies and an exemption for the State accommodations tax (7%),
South Dakota: Refund for contractors’ excise, sales and use taxes paid in connection with films spending over $250,000 (on taxable costs) in the state. The 4% refunds apply to costs incurred and paid before June 30, 2011.
Tennessee: Tiered rebate program for in-state qualified production expenditures 13% base rebate, 2% additional rebate if at least 25% of the cast and/or crew are Tennessee residents. (“Day players” and extras not included in determining the 25%), an additional 2% (maximum of $100,000 rebate) if the production company spends at least $20,000 for music created by Tennessee residents or for recording music in Tennessee. Out of state production companies must spend a minimum of $500,000 per production. Approximately $20 million appropriated for the rebate program.
Sales and use tax refund for out-of-state motion picture companies for goods and services purchased or rented in Tennessee if the company spends at least $500,000 within a 12-month period.
Texas: A new rebate program enacted in 2009 equal to 5-17.5% for film, TV, video game productions and commercials. $250,000 minimum in-state spend for film and TV productions, 70% of production crew, actors and extras must be Texas residents, 60% of the production must be filmed in Texas. Includes a provision related to content review of scripts. Cap per film is $2 million, $2.5 million cap for TV productions, $250,000 for video games. Comprehensive sales and use tax exemption for purchased or rented equipment or services used in the production of a motion picture or a video recording. No sales tax on hotel rooms for stays in excess of 30 days.
Utah: Effective 1/1/09 up to a 20% rebate or refundable tax credit beginning for films and TV programs. Both the credits allocated and the rebates are capped. $7,793,700 for the credit program each fiscal year 09-10 and 2010-11, and the rebates are capped at $2,206,300 in each fiscal year as well as a per production rebate cap of $500,000. Also available, a sales and use tax exemption for purchase or lease of machinery and equipment granted to film, television and video productions. The transient room tax exemption applies to sales and use tax taxes for accommodation charges for a stay of 30 consecutive days or longer.
Vermont: State sales and use tax exemption for the purchase or lease of goods and services used in the production of films, television programs or commercials. Credit for nonresident income tax for commercial film production if Vermont income tax exceeds income tax rate in the state of residence. No hotel or meal tax after 30 days.
Virginia: Funding for a performance-based incentive will provide a cash rebate at the Governor’s discretion, taking into consideration length of filming, job creation, trainees hired, goods and services purchased. The rebate will be paid to qualified production companies at the end of physical production and payment will be issued upon completion of a report of Virginia expenditures. Additional state incentives include an exemption from state sales and use taxes and hotel taxes for stays of 30 days or more in many localities. In most cases, state owned locations are provided free of charge. Based on availability, use of a state owned 35,000 square foot office building (Richmond) for office and production is accessible. The Film Office specializing in assisting in negotiating other free or low cost locations that have historically resulted in significant savings to productions shooting in the state.
Washington: A rebate of up to 30% of qualified production expenses on a feature film with expenditures in WA of at least $500,000 and $300,000 for a television episode. Per production cap of $1 million. Overall cap of $3.5 million. Sales and use tax exemption for the purchase or rental of production equipment and services used in motion picture or video production or post-production. No sales and use tax on vehicles used in production. No tax on hotel stays in excess of 30 days. No state individual income tax.
Washington, DC: A new incentive program but no available funding yet in 2010. Rebate of 42% on qualifying direct production expenditures, which are subject to DC tax. Lower threshold of 21% rebate if not subject to tax in DC; 30% rebate of the qualified payroll expenditures. Also includes job training and infrastructure investment incentives.
West Virginia: Transferable tax credit with a minimum in-state spend of $25,000, up to 27% for a broad array of in-state production and post production expenditures (including payroll) plus an additional 4% if ten or more full-time employees are in-state residents (including payroll service company employees) bringing the maximum credit to 31%. 5% of the credit is not available for expenditures attributable to a production, which is eligible for the Federal New Markets Tax Credit Program.
Wisconsin: Refundable individual/corporate income/franchise tax credit equal to 25% of in-state production-related expenditures and a non-refundable wage credit equal to 25% up to the first $25,000 for in-state wages (excluding the 2 highest paid employees). Also provides for a credit equal to sales/use tax paid on purchases of tangible personal property and taxable services directly used in a production. The unused sales/use tax credit may be carried forward for 15 years
Wyoming: A rebate program up to 15% on in-state production related purchases, leases, salaries and benefits (except the two highest paid actors) if a minimum of $200,000 is spent in state. The rebate also covers payments for preproduction, production, post-production and digital media effects services rendered in the state. The annual cap for the program is $1 million. Wyoming businesses offer production companies filming in Wyoming a 10% discount on production related services including hotels/motels, restaurants, caterers, etc. No tax on hotel stays in excess of 30 days. No state corporate or individual income tax.
Your comment:
You must be logged in to post a comment.
