7 Film Friendly US States with Great Tax Incentives
We consider these 7 states film-friendly for one reason: the best tax incentive jurisdictions for video production! At the end of each description, we’ve included a link to each state’s film office. You can find additional information on those links regarding each state’s tax incentives. As a fellow production company, we hope that this list of 7 Film Friendly US States with Great Tax Incentives helps you receive the best benefits possible. We want nothing more than to foster success in your future production endeavors. Good luck and happy filming!
In Massachusetts, the field of production can sell tax credits to MA taxpayers. On the flip-side, you can restore tax credit with the State for cash. That rate is 90% of the tax credits collected. This is known as transferable and redeemable tax credit.
Regarding rates, production receives 25% on qualified production expenditures, which includes nonresident rectification. The cap for individual compensation is $1M. But if you do half of your principal photography days or half of your total production expenditures in MA, there is no cap.
The minimum spend is $50k. Additionally, independent CPA cost verification is required, and you cannot earn credits with the state after transferring them to another individual or entity. Sales tax exemption for production expenditures is also available.
Film Office: http://www.mafilm.org/production-tax-incentives/
Georgia has transferrable tax credits, meaning that production can sell tax credit to the state’s taxpayers. Rates run at 20% on certified expenditures, including nonresident compensation, with an added 10% if the production holds end credit/exceptional GA promotional material. Basically, most productions are qualified for 30% total rate.
Not applying to payments made to loan-outs, there is an individual compensation cap of $500k, which is also the minimum spend number. Unlike MA, there’s no required final certification process, but the state offers a “verification review” at $55/hour per state auditor. This insulates purchasers of certified credits from recapture.
Film Office: https://www.georgia.org/industries/film-entertainment/georgia-film-tv-production/production-incentives
The state of Louisiana has redeemable tax credit where production can exchange tax credit for cash at an excellent rate of 88% of the tax credits earned after paying for the transfer fees. With a 25% base rate on certified production expenditures, there’s a 5% increase to the base rate if over 60% of production takes place outside of metro New Orleans. These area-oriented rules should be thoroughly researched before addressing redeemable tax credits.
LA has a $150M annual reservation cap, which can possibly allocate from future years (if exhausted). Additionally, there is a $180M annual cap on tax credits held with the state. These events can unfortunately delay the monetization of credits.
Film Office: https://louisianaentertainment.gov/
This tropical state offers refundable tax credits where production receives a cash refund after filing tax return. This state’s rates are 20% on certified production expenditures with a 5% extra credit for production in counties outside of Honolulu County. $15M is the tax credit cap per production with a minimum spend number of $200k.
Many expenditures involving, and subject to, Hawaii tax are eligible. This includes the cost of flights and shipping equipment to and from Hawaii.
Film Office: http://www.hawaiifilmoffice.com/
5. New Mexico
In New Mexico, the type of incentive is refundable tax credit, so production obtains a cash refund after submitting tax return. This states rates include:
- 25% on certified production expenditures for film;
- 30% certified production expenditures for television;
- 30% regarding resident BTL crewmembers when working in a qualified production facility;
- and 15% on nonresident BTL crewmember compensation (when meeting many conditions, like a high level of production activity).
The annual claims cap in NM is $50M, and the minimum spend number is $500k for TV/features while the minimum for music videos/soundtracks is $50k.
Film Office: https://nmfilm.com/
Pennsylvania has transferable tax credit where production can sell tax credit to PA taxpayers. Rates are 25% on certified production expenditures and 5% credit added to those expenditures if using a qualified facility and meeting other requirements.
The annual cap is reserved by application, set at $65m, with a $15m aggregate ATL compensation cap. The minimum spend number for PA is 60% of the PA expenditure budget.
Film Office: https://filminpa.com/
This Midwestern state offers production companies refundable tax credit which can be traded for a cash refund after filing tax return. Rates run at $30m on certified production expenditures with an annual cap of $40m. This yearly program cap is reserved by application.
The minimum spend number for Ohio is $300k and, like most states, loan-outs must be registered with the state.
Film Office: http://www.discoverohiofilm.com/