TYPE OF REBATES
All rebates are not created equal. Aside from the layers of complexity you'll need to understand for wherever you shoot, equally important is how you actually get you money returned to you. Below I outline the two types and issues to be aware of.
OK, so it's not actually 'cash' - but they will cut you a check. Many states offering this type of rebate will work to return your money within 30 to 90 days. Keep this time span in mind when creating your Cash Flow. If the rebate will be rendered after potentially months of time, you'll need to allow that money time to get back to you. Also, as with ALL rebates - this one is most particularly important to understand that often the states will count the start of the waiting period from the day your application and back-up materials are complete. This means that your accounting department could turn in everything, then three weeks later the state asks for something you forgot. So, now you need to start that clock again.
Tax credits will benefit either the production company, an investor (or investing company) or a third party who buys the Tax Credit (called Vouchers). Please note (and this is the major rub here). Both types of Tax Credits often take months, if not years, to monetize. This means that not only is your cash flow affected, you need to attribute more money in the initial budget to pay interest on the initial loan until the resulting tax rebate is received. To this this even more plainly, if you do a film for $10M and expect a rebate of (let's say) $1M in tax credits, you might want to cash flow $11M on the front end to pay for everything - or else, you need to plan your post production accordingly and perhaps take a few months down time.
A Refundable Tax Credit is where the production entity files a tax return in the state it produced in (and therefore attempting to get a return of funds) with the end result being a reduction of taxes owed. Should the production entity not owe any taxes, the rebate is rendered as a tax refund. Should the company owe, the amount owed is reduced from the potential tax rebate first.
A Transferable Tax Credit, like the Refundable type, is a refund based on a tax return. However, the difference here is that you may sell these "Tax Vouchers" to a third party. The thing to keep in mind here is that if you expect a Tax Credit refund of (let's say) $1M - you will not be able to find anyone to buy those vouchers for $1M. Most vouchers will sell for anywhere between 45 to 80 cents on the dollar. This means your $1M rebate could be worth only $650,000. Ensure you take this into account when doing your budget and cash flow.
REBATE vs. INCENTIVE
It's worth noting that 'incentives' often gets confused with 'rebates'. Yes, a rebate of some sort is an incentive to shoot somewhere. However, keep this distinction in mind as you review the following list of some of the most common incentives.
Tax-free accommodations, after a stay of 30 days or more
No permitting fees
As you can see, by definition of the word, these items are incentives to go somewhere and shoot your film.
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