Have You Seen Our New Websites?
Our new EP Financial Solutions site features PDFs of our latest domestic and international editions of The Guide, our clickable comparison map, information about our various services, and links to every U.S. film commission. It’s a one-stop-shop to get you started in the ever-changing world of production incentives.
** Be sure to check out our brand new, exclusive, jurisdiction filtering feature! Simply enter your project criteria and filter for the jurisdictions that meet your needs. **
Whether you’re looking to buy or sell tax credits, our Tax Credit Placement website guides you through the transfer process simply and efficiently.
U.S. Jurisdiction Updates
For more information on incentives in each state, visit the interactive Production Incentives map and click on the state of interest.
Proposed ‒ SB 29 was introduced on February 4, 2015 and referred to Labor and Commerce. The bill intends to repeal the film tax credit program, effective July 1, 2015.
Update ‒ The California Film Office released additional information regarding the upcoming changes to their program, dubbed “Film and TV Tax Credit Program 2.0”:
- April 1, 2015 ‒ OLD PROGRAM: Final Application Process Via Lottery
- ONLY independent projects may submit an application
- Lottery will allocate $10M in tax credits reserved for independent projects
- All established regulations/protocols will apply under the old program
- Allocations will be distributed beginning July 1, 2015; principal photography may not begin prior to receiving a credit allocation
- May 11‒17, 2015 ‒ NEW PROGRAM: First Application Period (for FY 2015‒2016: July 1, 2015 ‒ June 30, 2016)
- Only non-independent TV projects may submit an application
- Each project type will have two application periods ‒ additional periods to be announced
- $55.2M in tax credits available for new TV series, TV pilots, MOWs, and miniseries for any distribution transmission
- $27.6M in credits available for relocating TV series
- Credit allocations will be issued on or after July 1, 2015; principal photography may not begin prior to receiving a credit allocation
Regulations for the new program are currently being developed. Please visit the California Film Commission website for more information and updates.
Proposed ‒ On January 28, 2015 HB 451 was introduced to the house. NOTE: The Florida Senate plans to introduce a separate film incentive bill in the near future. The House bill would amend the current tax incentive with several changes, including the following highlights:
- Extends the sunset date from June 30, 2016 to June 30, 2021.
- Increases qualified spending from $625K to $1M per episode for “high impact television programs” that have at least seven episodes per season, or is a telenovela that has qualified expenditures of more than $4.5M, a minimum of 45 principal photography days in the state with 90% of cast and crew being legal residents of Florida, and 90% of production occurring in Florida.
- Adds “Direct-to-Internet television series” to the definition of a production.
- Adds proof of financing and non-qualified expenditures to required documentation to the Office of Film and Entertainment.
- Productions submitting applications after all tax credits for a fiscal year are certified will receive an assigned queue number. To the extent an application is assigned a queue number and the tax credit amounts allocated for a fiscal year have been certified, then such application is deemed withdrawn after 6 months, with written extension requests allowed for 3 months.
- For any fiscal year, the Florida Film Office may certify only tax credits allocated for that fiscal year except for high-impact television production for credits from the next fiscal year if the production is a series that has a renewal order, or is a telenovela with an order contract.
- 5% of a production’s tax credit will go to a Florida workforce training program or higher education program approved by the state.
- A production company that makes a high-impact production commitment shall provide internship opportunities for five Florida residents from an approved recipient of workforce development funds.
- If a production company fails to meet its high-impact production commitment for a particular fiscal year, the production company and its affiliates are precluded from applying for these tax credits for 2 fiscal years.
- Additional promotional requirements needed for productions certified under a high-end production commitment.
- Removes 5% credit from underutilized areas.
- Provides an additional 15% credit for compensation and wages paid to full-time students participating in a “road-to-independence” program, individuals with development disabilities, and veterans residing in Florida.
- A production company that makes a Florida capital investment of more than $10M may elect to be treated as a “high-impact production” during the year such costs are incurred. The capital improvements must be permanent and must remain in the state as part of a qualified production facility after the election period ends.
Proposed ‒ HB 150 was introduced to the House on January 28, 2015 and would allow for an additional credit of 5% of the salary of each Georgia veteran employed by the production.
Update ‒ After a successful eight-year tenure, Betsy Steinberg has stepped down from her role as Illinois Film Commissioner, effective January 16, 2015. In the interim, inquiries regarding production in Illinois may be directed to Assistant Deputy Director, Raul Esparza III. Specific questions regarding the state’s tax incentive may be directed to Tax Credit Manager, Cesar Lopez.
Proposed ‒ On January 6, 2015, HB 1087 and SB 21 were proposed and referred to the Ways and Means Committee. The mirrored bills would reinstate Indiana’s incentive program, which expired in 2012, as an annual $2.5M refundable tax credit. Highlights of the proposed program are as follows:
- No per project cap.
- Qualifying expenditures would include ATL and BTL resident labor.
- Creates a tiered system:
- For productions with qualified spend of less than $6M, provides a tax credit of:
- 35% of Qualified Production Expenditures (QPE).
- 40% of QPE paid to an individual/entity located in economically distressed area.
- For productions with qualified spend of $6M or more:
- Provides a tax credit of up to 15% of QPE.
- In addition to minimum spend requirements, productions must also prove they are both “economically viable” and will “increase economic growth and job creation in Indiana.”
- $50K minimum QPE requirement.
- For productions with qualified spend of less than $6M, provides a tax credit of:
The program would be in effect as of January 1, 2016 and sunset December 31, 2018.
Proposed ‒ On February 6, 2015, HB 340 was filed. The bill would enhance the Kentucky film incentive program, and highlights of the proposed program include:
- Increase refundable tax credit to 35% of qualifying expenditures if production is filmed or produced in its entirety in an enhanced incentive county, and 35% for qualifying resident payroll expenditures (ATL and BTL).
- Increase refundable tax credit to 30% of qualifying expenditures, including qualifying non-resident payroll expenditures (ATL and BTL), if production is not filmed or produced in an enhanced incentive county.
- Increase cap for ATL production crew (residents and non-residents) to $1M per employee.
Enacted ‒ SB 1103 was enacted on December 26, 2014. The bill enlisted a series of changes to Michigan’s cash refund program including:
- All labor (BTL, ATL, non-resident, and resident) is combined under the Direct Personnel Expenditure (DPE) category, with no cap for resident or non-resident producers.
- ATL personnel cannot total more than 30% of the total incentive awarded.
- Maintains the minimum spend requirement of $100K for combined QPE and DPE.
- Standardizes a rate of 25% for all QPE and DPE.
- Eliminates the cap on compensation and payments paid to resident and non-resident producers.
- An additional 3% will be available for all QPE/DPE at a qualified production facility or 10% for a qualified post-production facility.
- At least 10% of a fiscal year’s budget must be allocated to qualified productions that are motion pictures, documentaries, or television series with a budget less than $15M.
- Television series may apply for successive seasons, presuming they have been ordered. Shows completing production of their current season and applying for additional seasons will be awarded preference for funding.
- Instates a tiered system which increases the ratio of resident to non-resident personnel over the life of the program, ranging from (1) Michigan resident to every non-resident hired on January 1, 2015 through September 30, 2017 up to (3) Michigan residents for every non-resident hired after October 1, 2022.
- Producers may apply for a waiver of this requirement in the case where it is determined there are insufficient Michigan residents available for hiring.
- All deferred, residual, or contingent compensation, royalties, or profit participation relating to the production must be subject to taxation in the state and applicable taxes must be withheld and paid to the state for a period of not less than 12 years following the theatrical release of the qualified production, or to the extent the production company elects not to withhold:
- ATL personnel must be registered to do business under the laws of Michigan. ATL personnel must be notified of their registration obligations in writing at the time of engagement for their services.
- The registration requirement is waived for the ATL services of an actor receiving less than $250K in the state for its services and any related residual payments are based solely on a collective bargaining agreement.
- Funding remains at $50M for the 2015 fiscal year and will be approved each year thereafter.
- Sunsets December 26, 2021.
Proposed ‒ On January 29, 2015, HB 4122 was introduced and referred to the House Tax Policy committee and changes the sunset date for the film and digital media production assistance program to September 30, 2015.
Update ‒ Jenell Leonard is the new Director of the Michigan Film Office. See update from the Michigan Film Office for more information.
Update ‒ HB 120, as previously reported on in our December 2014 newsletter, has been amended to include a sunset date of December 31, 2023, and has been referred to the Appropriations committee.
Proposed ‒ On January 8, 2015 HB 655 was introduced and referred to the Ways and Means committee. This bill would provide:
- A 25% transferable, non-refundable tax credit, with a 5 year carryover, on total aggregate payroll when total production costs incurred in the state equal or exceed $50,000 during a single taxable year.
- An additional 25% transferable, non-refundable tax credit on all New Hampshire production expenses and qualified non-New Hampshire expenses if:
- New Hampshire production expenses exceed 50 percent of the total production expenses; or
- At least 50 percent of the total photography days take place in the state; or
- Over $250K in eligible New Hampshire production expenses are incurred.
- Aggregate salary and compensation amounts including all per diems, housing, and other allowances, paid to, or for the services of, an individual shall not qualify for the credit to the extent such amounts exceed $2M.
- An annual cap of $10M in tax credits available for any fiscal year. The Commissioner may grant each taxpayer claiming the credit the proportional share of the maximum aggregate credit amount to the extent the aggregate limit is claimed in any fiscal year.
- A completed application with a $100 non-refundable application fee is to be submitted to the film office within 90 days of the production start date. An extension can be given through the approval of the film office.
- The production agrees to include an acknowledgement that the motion picture was filmed in the state of New Hampshire and a logo placed in the credit of the film.
- The production company agrees to provide the film office with an independent audit to verify production expenses are eligible for the credits.
- A production company has no more than 90 days after the end of the last production expenses to apply to the film office for a production tax credit voucher.
Proposed ‒ On January 22, 2015 HB 216 was introduced. This would allow a film production company that is eligible to receive a film production tax credit the ability to assign the tax credit to a third-party financial institution. The department shall remit to the institution the approved tax credit amount rather than remitting it to the production company. A financial institution is defined as a bank, savings institution, or credit union that is organized or chartered pursuant to the laws of New Mexico or the United States. This act, if adopted, will be applicable to taxable years beginning on or after January 1, 2015.
Proposed ‒ On January 7, 2015, AB 671 was introduced and referred to the Assembly Ways and Means Committee. The bill would include documentary film as a “qualified film” under the empire state film production tax credit and would take effect immediately and apply to taxable years beginning on or after January 1, 2015.
Proposed ‒ On January 9, 2015, SB 1297 was introduced and referred to the Senate Investigations and Government Operations Committee. The bill would increase the aggregate annual amount of the empire state film production credit based upon annual inflation from 2015 through 2019, never to be less than $420M.
Proposed ‒ On January 19, 2015 HB 1420 was introduced and referred to the Joint Finance and Taxation Committee. The bill would create a non-refundable and non-transferable tax credit of 14% for the first $50K paid to North Dakota residents and 9% of qualified expenditures from a North Dakota vendor. An application and $500 application fee must be submitted to the Department of Commerce before the start of principal photography. The Department of Commerce has 30 days to approve applications. Within 60 days of completion of principal photography, the production company is required to submit a list of all expenditures and compensation paid to North Dakota residents. The tax credit cannot exceed the tax payer’s liability. If passed, this act would be effective December 31, 2014.
Proposed ‒ On January 12, 2015, HB 2072 was introduced and referred to the House Transportation and Economic Development Committee. The bill would increase the amount of tax credit from $10M annually to $20M annually beginning fiscal year July 1, 2015.
Proposed ‒ SB 218 and SB 219 were both introduced on January 15, 2015, and were referred to the Senate Finance Committee. The former bill would raise the annual cap from $60M to $125M for the film production tax credit for fiscal years beginning on or after July 1, 2015. SB 219 would allow for the reissuance of unused tax credits previously allocated in any fiscal year, and the amendment would take effect immediately.
Defeated ‒ On January 1, 2015, Governor John deJongh, Jr. vetoed Bill 30-0417. The bill (as previously reported on in our October 2014 newsletter) would have created an incentive of up to 29% of total qualified production spend as well as an additional credit for resident labor and hotel exemptions. The previously enacted STARS Act of 2011 remains in effect. (See The St. Croix Source)
Proposed ‒ HB 2053 was introduced on January 14, 2015 and was assigned to a Finance subcommittee. The bill would extend the sunset date of the motion picture production tax credit by one year, to January 1, 2020, as well as increase the annual funding from $6.5M to $15M for each fiscal year following 2016.
Update ‒ On January 1, 2015, Mayor-elect Muriel Bowser appointed a new Director of the Office of Motion Picture and Television Development (MPTD), Angie M. Gates. Ms. Gates has an extensive political and entertainment-oriented background, including early career work with the New Orleans Film Commission and Manager of the Historic Warner Theater in D.C. (See DC.gov)
For more information on incentives around the world, visit the interactive Production Incentives map and click on the country or region of interest.
On January 12, 2015, the State Fund of Cinematography issued a call for submissions for registration into the incentives program and announced the 2015 incentive budget will be CZK 500M. Registration closed on January 30, 2015. Successful applicants will be issued a Registration Certificate on February 16, 2015 and have three months to apply for the rebate. (See Czech Film Commission)
As of December 2014, the Tax Rebate for International Production (TRIP) scheme has been modified to qualify productions spending at least 50% of their total budget in France, as opposed to the previous minimum spend threshold of €1M ($1.2M). The criteria have also been made more flexible for VFX under the TRIP scheme. Beginning on January 1, 2016, the international scheme will increase from 20% to 30% and the cap will rise from €20M ($22.4M) to €30M ($34M). (See Variety)
Effective January 1, 2015, Ireland’s Section 481 has been extended to December 31, 2020. The enhancements also include an increase from 28% to 32% of qualified spend as well as the allowance to include all cast and crew working in Ireland, regardless of nationality, as “eligible individuals.” (See Irish Film Board)
Since production incentives change on almost a daily basis, EP Financial Solutions maintains its expert standing with our constant involvement in worldwide seminars and conferences.
AFCI Locations Show
Los Angeles, CA
March 5‒7, 2015
Our EP Financial Solutions team will be at the AFCI Locations show next month. We’ll be at Booth #102 so be sure to stop by and say hi! On Saturday, Joe Chianese will lead a panel entitled, “Incentivize Your Story: Production Incentives for the Writer.” Understanding the incentive landscape can be a powerful tool in determining which stories get told and how to navigate location-based production. Learn how writers can get the most from production incentives. The session will take place from 1:30 pm ‒ 2:30 pm.
What does every producer with a film in the 2015 Sundance Film Festival have in common? They had to determine where they would shoot, and if production incentives would play a role in their project’s completion. Moderator Joe Chianese, EVP of EP Financial Solutions, led a panel featuring the top independent producers of the 2015 Sundance Film Festival, along with the film commissioner and incentive specialist who helped them bring their projects to completion. Panelists included: Bonnie Curtis (Producer, Last Days in the Desert), John Hadity (EVP, EP Financial Solutions), Houston King (Producer, Results), Julie Lynn (Producer, Last Days in the Desert), and Carroll Morton (Manager Entertainment Industry Development, City of New Orleans). Register to View the Archived Webinar
Sundance Film Festival
Park City, UT
January 22‒27, 2015
Joe Chianese, John Hadity, and Marco Cordova were stationed at the AFCI Beyond Cinema Media Studio in Park City for the Sundance Film Festival. We hosted a number of events including a Filmmakers Breakfast on Sunday, January 25, at the New York Lounge, and a panel discussion later that afternoon entitled, “State of Affairs: Production Incentives Roundtable.” On Monday, January 26, we hosted a Film Financing Panel and Party where we discussed the financing issues that need to be considered and various options to get your independent film produced. A networking reception followed the panel.
EP Financial Solutions in the News
Variety ‒ “Artisans Feature: Lures in a Land of History”
February 3, 2015
Variety ‒ “Artisans Feature: Doing the Charleston”
January 27, 2015
Variety ‒ “Artisans Feature: The Song of the South”
January 20, 2015
Variety ‒ “Artisans Feature: Lone Star Lures”
January 13, 2015
Variety ‒ “Artisans Feature: Middle-Earth High Incentives”
January 6, 2015
DISCLAIMER: These materials have been prepared by Entertainment Partners for informational purposes only and should not be construed as tax advice or relied on for specific projects. Though every effort has been made to remain current, laws and incentives change and therefore this information may have been revised. Please contact your legal or tax advisors to confirm any laws or the effect of incentives on your project. For updates and more information, please visit our website at www.productionincentives.com.
Providing links to other sites shall not be construed as an endorsement by Entertainment Partners of the linked websites or the opinions expressed on such websites.