Film Tax Incentives by Type
State film tax incentives generally fall into one (or more) of seven categories:
- Movie Production Incentives (MPIs): “Movie Production Incentive” is an umbrella term referring to any state film tax incentive or production tax credit offered filmmakers to encourage film production in-state.
- Film Tax Credits: Tax credits remove a portion of the income tax owed to the state by the production company. Production companies must often meet minimum spending requirements to be eligible for the credit. These credits come in two types – transferable or refundable.
- Transferable credits allow production companies to sell those credits to other taxpayers, who then use them to reduce or eliminate their own tax liability
- Refundable credits mean that the state will pay the production company the balance in excess of the company’s owed state tax.
- Cash Rebates: Cash rebates are pretty straight forward and paid to production companies directly by the state. These are often based on percentage of the company’s qualified in-state expense.
- Grant: Only a few states offer grants to production companies.
- Sales Tax Exemption & Lodging Exemption: Exemption from state sales taxes may be offered to companies as a tax incentive. Many states offer exemption from lodging taxes to all guests staying over 30 days, but these incentives are highlighted for production companies.
- Fee-Free Locations: A final type of tax incentive program offered by a few states allows production companies to use state-owned locations (such as parks, buildings, universities) at no charge.
State Film Tax Incentive Services
KPM has knowledge of state film tax incentive programs throughout the United States and has worked with major studios and independent producers alike. We can help you identify and maximize the benefit of each state film tax incentive program.
KPM’s film tax incentive services include:
- Working with production companies to maximize credits
- Performing the necessary agreed upon procedures and audits in a format consistent with the requirements of state oversight agencies
- Loan-out company consulting
- Entity structuring
- Corporate and business planning
- Tax compliance and advisory services
- Accounting and bookkeeping services