A Filmmaker’s New Best Friend – State Film Tax Credits
One of the best ways for a producer to help finance an indie project is through the use of state film tax credits. Although not all states are created equal in this area, the ones aiming to increase their revenue and create jobs using this program have made this a win/win for both their locations participating filmmakers. In short, what these tax credits do is allow producers to be reimbursed for a percentage ranging from between 5% to as much as 40% of qualified funds spent in that state. Upon completion of the project and a certified accounting of the spend, filmmakers receive either a rebate or transferable tax credit reimbursing them approximately 80-90 cents on the dollar following monetization.
Qualified expenses include cast and crew compensation, construction costs, post production, catering, and a variety of other items which may vary depending upon state’s program. Producers should check each one individually to determine its current status since changes have been known to happen quickly. Other variables include the depth of available crew, equipment, usable studios and locations and also union requirements. It is strongly recommended that you employ the services of a local CPA experienced in accounting practices within the filmmaking industry.
More detailed information is available from the Incentives Office at Santa Monica, CA. This organization was created to assist producers in maximizing their state film tax incentives or rebates by providing the most current and accurate information and assisting with the application process. They offer numerous services, some free and others requiring a fee, in addition to publishing a downloadable quarterly industry standard guide, monthly updates and alerts are provided at no cost. The Incentives Office also offers free of charge a qualified expense summary prepared for a given state and vendor recommendations for payroll, production insurance and services and completion bonds.
Paid options include a Complete Watchdog Service which helps determine the best locations for shoots including comparison budgets. Other benefits include detailed estimates of credits or rebates, assistance in preparing and submitting your applications and assisting your production accountant to ensure that documentation is completed properly. For a negotiated fee, the company will also prepare an estimate of expected rebates or credits for a given state or run comparisons for different states. They can be contacted via their website at www.theincentivesoffice.com.