News Twenty1: U.S. Film Production Incentives!

May 13, 2008 in Newsletter by admin

ALASKA is waiting for the Governor’s signature on their new incentive, which offers a transferable tax credit of 30%, plus 10% for local hires.

GEORGIA has increased its transferable credit to 20% of qualified spend, plus an additional 10% for inclusion of a Georgia presentation credit in the title sequence; the bill was signed by the Governor on Monday, May 12.

ILLINOIS has reinstated its incentive – 20% of the in-state spend; only Illinois-resident cast and crew qualify.

LOUISIANA, in addition to the 25% (plus 10% for local hires) transferable tax credit offered by the state, Jefferson Parish (outside of New Orleans) now adds a 3% rebate for production in the Parish (a parish is Louisiana’s version of a county).   There is a $100,000 cap on the rebate, increasing to $110,000 if both the production office and sound stage are in Jefferson Parish.

MASSACHUSETTS continues to be one of the more popular production locations, primarily because there are no per hire or per project caps, and no cap on the yearly total available.  Consequently, the state has hosted a number of large productions, with more planned for the next few months (depending on SAG waivers).  The city of Plymouth voted overwhelmingly on Saturday to build a full-scale studio in their town. MICHIGAN, with a new 40% rebate (plus 2% for production in certain core areas), is now the destination of choice for many producers.  The film commission has approved twenty-seven applications for production so far, with seven production offices opened and two films in production.  Michigan has a $2 million per hire cap, but no per picture or per year maximum.

MISSISSIPPI‘s governor has executed HB1351, which substantially improves the incentives program.  The rebate is now up to 30%, with out-of-state crew qualified at a lower rate.

NEW YORK state’s revised legislation has been signed by the governor; the below-the-line refundable tax credit is now 30%, and will be paid in a single year, rather than spread across two years. Details of the incentives program remain the same. (The separate New York City 5% credit is still spread across two calendar years).  $75 million is available for the fiscal year.

PENNSYLVANIA is now accepting applications for the fiscal year beginning July 1, with $75 million available for its 25% transferable tax credit program.

WEST VIRGINIA now has a new incentives program, offering a transferable tax credit of up to 31% of  qualified in-state spend.  A sales tax exemption is also available.

WISCONSIN is seeing a boom in production activity as a result of its new incentive program. “Public Enemies”, starring Johnny Depp, is currently shooting.

ACCOUNTING
More and more states now require a 3rd party audit as part of the incentives approval process.  A complete audit can be prohibitively expensive and time consuming. Louisiana pioneered a less restrictive audit, with the rules listed on the Louisiana website.  Michigan has adopted the Louisiana rules.  Meanwhile, Tax Credits, LLC has been working to make CPA review standards uniform throughout the country, and has created a uniform set of “Agreed Upon Procedures,” which New Jersey and Pennsylvania have adopted, and Massachusetts, Mississippi and West Virginia are currently reviewing. The Incentives Office has been encouraging states to adopt one or the other set of standardized accounting requirements.

SPRING INCENTIVES GUIDE
Electronic copies of The Incentives Office Spring, 2008 Guide to U.S. Production Incentives may be downloaded from our new website – http://theincentivesoffice.com.  Our Louisiana State Incentives Guide may be downloaded as well, and printed copies of the Spring Guide are available.

THE INCENTIVES OFFICE
The Incentives Office is an independent company that helps producers maximize their production incentives, helps states with their film incentives programs, and assists lenders in verifying estimated rebates and tax credits.  Most effectively, we take care of the entire incentives process for producers, from choosing the right state to filing the final documents and collecting the money.  We will be pleased to provide a current incentives summary for any state, including suggestions for vendors qualified in that state- payroll, completion bonds, production insurance, production service companies, tax credit brokers, and mezzanine lenders.  Just fill out the form at http://theincentivesoffice.com/page13.html, and we’ll get back to you very quickly.  Any questions, feel free to call – Dama Claire or Jeff Begun, at (310) 982-1340.  Or email – jeff@theincentivesoffice.com, or dama@theincentivesoffice.com