Many companies are always looking for legal ways to extend their dollars for production, and the Hollywood system is no different. Film Tax incentives have been a common practice since the early days of moviemaking, and every year, parts of the country offer these to bring the Hollywood business to their states.

Finding the best production incentive for a film, TV, web, or commercial project can mean millions in net savings for a budget. Film tax incentives are there to aid studios and even help in parts of the country. So what are film tax incentives? These tax incentives were first introduced in the 90s to assist production companies—big or small—and allowed studios and states to help each other out. These incentives were conceived as a response to the rising number of film and tv productions moving to other countries so that studios would be more inclined to produce in states with the best tax incentives.

The states would also benefit through productions filmed in their area because it drives the economy through employment opportunities, revenue, and related infrastructure development. These tax advantages allow studios to save money on taxes, get discounts on local goods, and even receive cash-back from the state—making a substantial difference in budgeting for the next project. In addition, however, there are types of incentives offered in varying states across the country.

 

The Different Types of Tax Incentives Available for Film in 2022

 

Grants: A common one in the moviemaking industry, most—if not all—production use this who come from outside the state to shoot temporarily. A direct disbursement is made to a studio by the government of a specific locale for a particular project, and unlike some tax credits, these don’t require tax liability.

Refundable Tax Credit: This type of incentive only applies to tax credits. Filming production does not need to have an authentic state tax liability for the credit to be issued if a film credit is refundable. It’s more like a rebate, but a state tax return must be categorized before issuing the refund or return.

Transferable Refundable Tax Credit: As implied, transferable refundable tax credits are slightly different. This method is used when production can transfer their tax credits to local companies around filming to decrease or remove their tax liability.

Film Tax Rebates: To varying degrees, film tax rebates are similar to grants. The state and city issue production companies a check, or the local government, typically a percentage of the company’s qualified expense.

Bonuses: Not every state offers these additional perks for filmmakers. Bonuses are primarily given to producers that allow shooting on location free of charge, special agreements to film in public areas, hire local workforces, or discounts for shopping from local businesses.

Many states have a monetary amount or tax incentives, and it’s a great idea to find out which state suits a production shooting and money-saving need.

 

2022 Film Tax Incentives per state

 

Alabama

Incentive Type: Non-Transferable Refundable Tax Credit

Where To Apply: Alabama Film Office

Minimum Spend: $500,000

Annual Cap: $20,000,000

Production Cap: $20,000,000

This state only offers incentives for the first $20,000,000 of qualifying productions for their tax credit. This tax incentive includes the cost that has been accumulated in the state during pre-production, production, and post-production. It also consists of salaries and wages but does not include marketing and distribution expenses.

To qualify for the tax incentive, production companies must spend a bare minimum of $150,000 in a year and at least $500,000 on the entire project.

Alaska

Currently offers no film tax incentives.

Arizona

Currently offers no film tax incentives.

Arkansas

Incentive Type: Credit and Rebate Arrangement Credit

Where To Apply: AR Film

Minimum Spend: $200,000

Annual Cap: $4,000,000

Production Cap: None

The rebates include any costs sustained for development, pre-production, production, or post-production in Arkansas. The types of eligible output include scripted television, animation, documentaries, video games, feature films, and pilots. Unfortunately, commercials, talk shows, reality TV, and game shows do not qualify for this rebate.

California

Incentive Type: Non-Transferable Refundable Tax Credit

Where To Apply: California Film Commission

Minimum Spend: $1,000,000

Annual Cap: $330,000,000

Production Cap: $25,000,000

Productions must fall under the categories of non-independent feature films, television pilots, movies-of-the-week, and new television series to receive the 20% non-transferable California film production tax credits. One of the stipulations is that 75% of their budget must be spent in the state to qualify. In addition, filming productions can apply for a 25% credit if the budget is above $10,000,000.

Colorado

Incentive Type: Rebate Credit

Where To Apply: Colorado Film Incentive

Minimum Spend: $100,000 for local production, $1,000,000 for out-of-state production company, and $250,000 for video game shoots.

Annual Cap: $9,250,000

Production Cap: None

The rebate is associated with production-related payments made by a production company filming in Colorado to any person or business in said state. The payments are through payroll, vendor expenses, and workforce expenses. These tax incentives are excluded from being used toward talk shows, game shows, and post-only shows.

This rebate can only be given if 50% of the crew consists of Colorado Residents.

Connecticut

Incentive Type: Transferable Refundable Tax Credit

Where To Apply: Connecticut Office of Film, Television, and Digital Media

Minimum Spend: $100,000

Annual Cap: None

Production Cap: None

Connecticut’s Transferable Refundable Tax Credit can be applied to all filming projects. The production included under this tax credit are game shows, reality TV, and talk shows, but production costs must reach at least $100,000 in the state.

Delaware

Currently offers no film tax incentives.

Florida

Currently offers no film tax incentives.

Georgia

Incentive Type: Transferable Refundable Tax Credit

Where To Apply: Georgia USA

Minimum Spend: $500,000

Annual Cap: None

Production Cap: None

All production types are eligible for this tax credit—including talk shows, reality TV, and games. In addition, companies will get a 20% tax credit and additional 10% credit in grants if the “Made In Georgia” logo is part of the film credits. Of course, all production and post-production spend must be done in Georgia.

Hawaii

Incentive Type: Transferable Refundable Tax Credit

Where To Apply: State of Hawaii Film Office

Minimum Spend: $200,000

Annual Cap: $50,000,000

Production Cap: $15,000,000

All production types are eligible for the Hawaii film tax credit, including talk shows, reality TV, and game shows. In addition, a 5% film tax credit will be added for filming on all neighboring islands and a 20% tax credit for filming on the island of Oahu.

Idaho

Currently offers no film tax incentives.

Illinois

Incentive Type: Transferable Refundable Tax Credit

Where To Apply: Illinois.gov

Minimum Spend: $100,000

Annual Cap: None

Production Cap: None

The 30% transferable tax credit on qualified expenditures is sustained in Illinois. In addition, an additional 15% production incentive will be handed to production companies if they hire people from disadvantaged areas where the unemployment rate is at least 150% of the state’s unemployment rate.

Indiana

Currently offers no film tax incentives.

Iowa

Currently offers no film tax incentives.

Kansas

Currently offers no film tax incentives.

Kentucky

Incentive Type: Non-Transferable Refundable Tax Credit

Where To Apply: Kentucky Department of Revenue

Minimum Spend: $250,000 and $20,000 for documentaries.

Annual Cap: $75,000,000

Production Cap: None

All filming projects are qualified for Non-Transferable Refundable Tax Credit, excluding video games and commercials. These suitable productions and spending must be conducted in the Commonwealth of Kentucky.

Louisiana

Incentive Type: Non-transferable and Partly Refundable Tax Credit

Where To Apply: Louisiana Entertainment

Minimum Spend: $300,000

Annual Cap: $150,000,000

Production Cap: $20,000,000

All filming projects are qualified for Non-Transferable Refundable Tax Credit and reality shows, commercials, and video games. Yet, companies must spend at least 25% of their budget in the state.

Maine

Incentive Type: Rebate and Tax Credit

Where To Apply: Maine Film Office

Minimum Spend: $75,000

Annual Cap: None

Production Cap: None

All filming projects are qualified for the Rebate and Tax credit, excluding talk shows.

Maryland

Incentive Type: Non-Transferable Refundable Tax Credit

Where To Apply: Maryland Film Office

Minimum Spend: $250,000

Annual Cap: $12,000,000

Production Cap: $8,000,000

Commercials, scripted television, pilots, and feature films can apply for the tax incentives in Maryland; however, principal photography work in the state must reach at least 50%.

Massachusetts

Incentive Type: Transferable and Partly Refundable Tax Credit

Where To Apply: MA Film Office

Minimum Spend: $50,000

Annual Cap: None

Production Cap: None

Massachusetts has several production categories that are eligible for the state’s tax credit. Filming projects must fall under scripted television, animations, documentaries, feature films, commercials, pilots, and reality TV. Projects that are not qualified are talk shows, video games, and talk shows. Part of the clause is that production must spend 25% of their budget in the state.

Michigan

Currently offers no film tax incentives.

Minnesota

Incentive Type: Tax Rebate

Where To Apply: MN Film TV

Minimum Spend: $100,000 for rebates and $1,000,000 for tax credit.

Annual Cap: $475,000 for rebate and $4,950,000 for tax credit.

Production Cap: None

All filming projects are qualified for the Tax Rebate, excluding talk shows, video games, and game shows.

Mississippi

Incentive Type: Rebate

Where To Apply: Mississippi Film Office

Minimum Spend: $50,000

Annual Cap: $20,000,000

Production Cap: $20,000,000

All filming projects are qualified for the Rebate in Mississippi, excluding talk shows, video games, and game shows. This opportunity includes production costs paid to vendors and companies in the state.

Missouri

Currently offers no film tax incentives.

Montana

Incentive Type: Transferable Non-Refundable Tax Credit

Where To Apply: Montana Film Office

Minimum Spend: $350,000

Annual Cap: $12,000,000

Production Cap: $5,000,000

The Transferable Non-Refundable Tax Credit can be used for eligible production types such as video games, feature films, animation, pilots, commercials, and scripted television. An additional 5% tax incentive is granted if the companies use “Film Montana” on the screen credits.

Productions that are reality TV-based, documentaries, talk shows, and game shows do not qualify.

Nebraska

Incentive Type: Grant

Where To Apply: Nebraska Department of Economic Development

Minimum Spend: $1,000,000

Annual Cap: $1,000,000

Production Cap: $400,000

Since July 2021, this Grant is only allowed to be used if a feature film production is shot in Nebraska and tells a story about the state. Also, 50% of the workforce from the said project(s) must be from Nebraska.

Nevada

Incentive Type: Non-Transferable Refundable Tax Credit

Where To Apply: Nevada Film Office

Minimum Spend: $500,000

Annual Cap: $10,000,000

Production Cap: $6,000,000

All filming projects are qualified for the Non-Transferable Refundable Tax Credit in Nevada.

New Hampshire

Currently offers no film tax incentives.

New Jersey

Incentive Type: Transferable Non-Refundable Tax Credit

Where To Apply: NJ Economic Development Authority

Minimum Spend: $1,000,000

Annual Cap: $100,000,000

Production Cap: None

All filming projects are qualified for the Transferable Non-Refundable Tax Credit but exclude talk shows, video games, and commercials. In addition, the state’s tax credits propose an extra 2% tax credit on eligible production spending that also has an approved diversity plan.

New Mexico

Incentive Type: Transferable Non-Refundable Tax Credit

Where To Apply: New Mexico Film Office

Minimum Spend: None

Annual Cap: $100,000,000

Production Cap: None

All filming projects are qualified for the Transferable Non-Refundable Tax Credit for the state of New Mexico.

New York

Incentive Type: Non Transferable Refundable Tax Credit

Where To Apply: New York State Film Tax Credit Program

Minimum Spend: $250,000

Annual Cap: $420,000,000

Production Cap: None

The state’s film tax credit program extends commercials, scripted television, feature films, and pilots. If the production is filmed in or near New York City’s five boroughs—including Rockland, Suffolk County, Westchester, and Nassau—then the budget must have a minimum of $1,000,000. If shot elsewhere, the budget must be a minimum of $250,000 to be eligible for the incentives.

North Carolina

Incentive Type: Tax Rebate

Where To Apply: North Carolina Film Office

Minimum Spend: $1,000,000

Annual Cap: $31,000,000

Production Cap: $7,000,000

All filming projects are qualified for the Tax Rebate Credit but exclude talk shows, video games, and game shows. Feature films must devote $3,000,000 at minimum in North Carolina to qualify. Other movies must spend a minimum of $1,000,000. The offer also specifies that at least 75% of its funding be secured before applying.

North Dakota

Currently offers no film tax incentives.

Ohio

Incentive Type: Non-Transferable Refundable Tax Credit

Where To Apply: Cleveland Film

Minimum Spend: $300,000

Annual Cap: $40,000,000

Production Cap: None

All filming projects are qualified for the Non-Transferable Refundable Tax Credit but exclude talk shows and game shows.

Oklahoma

Incentive Type: Tax Rebate

Where To Apply: Oklahoma Film and Music

Minimum Spend: $25,000

Annual Cap: $30,000,000

Production Cap: $8,000,000

All filming projects are qualified for the Tax Rebate Credit but exclude video games.

Oregon

Incentive Type: Tax Rebate

Where To Apply: Oregon Film

Minimum Spend: $1,000,000

Annual Cap: $20,000,000

Production Cap: $7,000,000

All production types are eligible for the Tax Rebate except talk shows. Eligible productions must spend at least $1,000,000 on a single TV series project. In addition, staff will get a rebate of 10% and a bonus if the production company hires locals from Oregon.

Pennsylvania

Incentive Type: Transferable Non-Refundable Tax Credit

Where To Apply: Pennsylvania Film Office

Minimum Spend: $100,000

Annual Cap: $70,000,000

Production Cap: $12,000,000

Except for video games, all project types are eligible for the Transferable Non-Refundable Tax Credit. Productions that spend 60% on their projects in the state will qualify for the film tax incentives. In addition, crews will earn a 25% tax credit and a bonus of 5% if stage filming requirements are met.

Rhode Island

Incentive Type: Transferable Non-Refundable Tax Credit

Where To Apply: Rhode Island Film and Television Office

Minimum Spend: $100,000

Annual Cap: $20,000,000

Production Cap: $7,000,000

Projects under the music videos, animation, commercials, and documentaries are qualified to receive the film tax incentive as long they spend the minimum in-state amount required. In addition, the local crew will earn a 30% tax credit if hired.

South Carolina

Incentive Type: Tax Rebate

Where To Apply: South Carolina Film

Minimum Spend: $1,000,000

Annual Cap: $15,500,000

Production Cap: None

Only production projects under scripted television, commercials, films, feature animations, and pilots may receive tax incentives. At least $1,000,000 must be spent over twelve months by the production company and at least $1,000,000 per episode for television productions. In addition, local crew members will get a 25% film tax rebate, and non-local crews will earn a 20% film production tax credit.

South Dakota

Currently offers no film tax incentives.

Tennessee

Incentive Type: Grant

Where To Apply: Tennessee Entertainment

Minimum Spend: $200,000

Annual Cap: Determined annually

Production Cap: $13,000,000

Feature films, pilots, commercials, and scripted television are eligible for the state’s film tax incentives.

Texas

Incentive Type: Grant

Where To Apply: Texas Film Commission

Minimum Spend: $250,000

Annual Cap: $45,000,000

Project Cap: $50,000,000

All project types are qualified for the Grant; however, 60% of production must be shot in the state for the film tax incentives.

Utah

Incentive Type: Tax Credit and Rebate

Where To Apply: Utah Film Commission

Minimum Spend: $500,000

Annual Cap: $8,290,000

Production Cap: None

Feature films, pilots, animation, documentaries, and scripted television are eligible for the state’s film incentives. In addition, productions with a budget of $500,000 or smaller will receive a cash rebate if the crew and staff are locals of Utah.

Vermont

Currently offers no film tax incentives.

Virginia

Incentive Type: Non-Transferable Refundable Tax Credit

Where To Apply: The Virginia Film Office

Minimum Spend: $250,000 for tax credit and $0 for grant

Annual Cap: $6,500,000 for tax credit and $3,000,000 for grant.

Production Cap: None

Documentaries, video games, scripted television, commercials, feature films, and pilots, are qualified for the tax credit; however, at least 50% of principal photography must be shot in Virginia for the film tax incentives. Crew members will receive at least a 15% tax credit and a 5% bonus for residents if production takes place at an economic disadvantage location. Projects with a budget of $250,000-$1,000,000 will get 10% bonus for non-residents.

Washington

Incentive Type: Tax Rebate

Where To Apply: Washington Filmworks

Minimum Spend: $300,000 per episode, $500,000 for feature films, and $150,000 for commercials.

Annual Cap: $3,500,000

Production Cap: None

Feature films, pilots, commercials, reality TV, animation, documentaries, and scripted television are eligible for the state’s film tax incentives.

West Virginia

Currently offers no film tax incentives

Wisconsin

Currently offers no film tax incentives

Wyoming

Currently offers no film tax incentives

 

Conclusion

The quote “Tis impossible to be sure of anything but Death and Taxes” – coined by British stage actor Christopher Bullock in 1716 – still rings true today. However, many incentives are implemented to counterbalance the inevitable impact of these taxes on the film industry. For more details about these incentives, you can visit our dedicated page or reach out directly to our experts at info@revolutiones.com.