Kentucky Film Tax Credit Update

Effective March 30, 2015, Kentucky House Bill 340 was signed by Governor Beshear which amends the film production incentive program for tax years beginning on or after January 1, 2015. The credit is a refundable, nontransferable credit with no sunset date.

With the new Bill, required local spend for a film/TV production has decreased from a $500,000 minimum to just $250,000. Required local spend for commercials decreased from a $200,000 minimum to just $100,000. Documentaries decreased from a $50,000 minimum to just $20,000, increasing these opportunities significantly for those applying for credits.

This bill further increased allowable qualified expenditures from 20% to 35% for productions filmed in an enhanced incentive county and from 20% to 30% for any productions filmed in whole or in part in any Kentucky county other than in an enhanced incentive county. Productions are required to track the requisite expenditures by county to ensure classification for the extra incentive bump for “an enhanced incentive county”.

For motion pictures/productions filmed in an enhanced incentive county, allowed qualified expenditures and qualified payroll paid to residents and nonresident BTL crew has increased to 35%. Qualified payroll expenditures paid to resident and nonresident ATL crew is not to exceed $1 million/employee.

For motion pictures/productions filmed in any Kentucky county other than an enhanced incentive county, qualified expenditures and qualified payroll paid to nonresident BTL crew has increased to 30%. Whereas, qualified payroll for BTL residents of Kentucky increased to 35%.

Qualified expenditures include, but are not limited to, the following items:

  • The production script and synopsis
  • Set construction and operations
  • Wardrobe, accessories, and related services
  • Lease or rental of real property in Kentucky as a set location
  • Photography, sound synchronization, lighting, and related services
  • Editing and related services
  • Rental of equipment
  • Vehicle leases
  • Food
  • Accommodations

Also new to the legislation, approved companies are now required to include screen credits in its final production that indicate the production received tax incentives from the Commonwealth of Kentucky as well as they must display the “Unbridled Spirit” logo.

For more information on the credit, see  http://filmoffice.ky.gov/ or you can learn more about the eligibility of your production from KPM Film’s designated Kentucky state page here http://kpmfilm.com/state/kentucky/You can also contact KPM Film tax specialist Chad Robinson (crobinson@kpm-us.com or 781 849 5357) to learn more about filming your production in the Bluegrass State.