• The Hollywood Reporter on LinkedIn
  • Follow THR on Pinterest

A Guide to the Latest Production Incentives

From New York State to the United Kingdom, U.S. states and foreign countries are competing to attract film and television productions.

New York state has extended its production incentive program through 2019. California has its film tax credit for two years through 2017.

As states and foreign countries compete for film and television productions, they are constantly revisiting the incentives that they offer.

STORY: Locations Show: How Colorado Lured the Hallmark Channel

Here are some of the most recent changes, as compiled by the production services company Entertainment Partners:

NEW YORK

New York State Film/TV/Commercial Incentive Program has been extended and modified — Passed on Friday March 29, 2013

SB 2609 has been signed by Gov. Andrew Cuomo and will extend the Empire State Production Tax Incentive Program until 2019, as well as provide an additional $2.1 billion in funding. The yearly budget remains at $420 million with a rolling cap on qualified production expenditures.

In addition, $5 million has been allocated to a 40 percent credit on qualified labor for areas north and west of Albany for fiscal years 2015–19.

Also, any variety or talk show program produced outside of N.Y. for five years, with a studio audience of more than 200 as well as either a budget of more than $30 million or at least $10 million in capital expenditures, will immediately qualify for the NYS production incentive.

Lastly, the annual allotment for the N.Y. postproduction credit has been increased to $25 million from $7 million for fiscal years 2015-19.

While prospective applicants must still spend 75 percent of their project's total postproduction budget in New York in order to qualify for the post-only tax credit, the new budget stipulates a new and separate threshold of the lesser of $3 million or 20% of the total visual effects and animation spend in New York to qualify. The lower threshold makes it easier for films with larger visual effects and animation budgets to qualify for the program. Additionally, the post-only incentive now applies to post services on animated features and TV programs.

CALIFORNIA

Gov. Gerry Brown signed legislation (AB 2026 and SB 1197), which extends the film tax credit for two years through June 30, 2017, with funding of $100 million per year. The new law simplifies the information that taxpayers are required to include on their credit application with respect to members of a combined reporting group and partnerships or limited liability companies.

GEORGIA

The Georgia film incentive program remains stable.

NEW MEXICO

House Bill 641 will be effective after June 30, following the governor's signing of the bill April 4, 2013. The bill will allow for an additional 5 percent credit for qualifying projects, bumping the total available credit up to 30 percent if a project meets the criteria. The 5 percent credit may also be applied to wages and fringes paid to residents. All payments of wages, fringe benefits or fees to a resident for talent, management or labor, and payment to a nonresident performing artist, are all direct production expenditures given that they are subject to taxation in New Mexico.

STORY: Tax Lawyer: Hollywood Needs Federal Incentives Now (Guest Column)

NORTH CAROLINA

Gov. Bev Perdue signed a technical corrections bill (SB 847) that extends the film tax credit through Dec. 31, 2014

MASSACHUSETTS

The Massachusetts House of Representatives submitted a 2014 fiscal budget proposal that did not institute a cap on the film tax credit program. Gov. Deval Patrick’s budget proposal, submitted previously to the House, included capping the film tax credit program at $40 million.

PENNSYLVANIA

Governor Tom Corbett signed legislation that makes changes to the 25 percent film tax credit (HB 761), effective July 2, 2012, including an additional 5 percent credit for feature and television film or television series intended for a national audience meeting the minimum stage filming requirement in a qualified facility. The minimum stage filming requirements follow:

·       If PA production expenditures < $30 million (per project):

o   Build ≥ 1 set at a "qualified production facility;"

o   Shoot ≥ 10 days at a "qualified production facility;"

o   Spend ≥ $1,500,000 in direct expenditures for use, rental or services of a "qualified production facility."

·       If PA production expenditures ≥ $30 million (per project):

o   Build ≥ 2 sets at a "qualified production facility;"

o   Shoot ≥ 15 days at a "qualified production facility;"

o   Spend ≥ $5 million in direct expenditures for use, rental or services of a "qualified production facility."

Annual funding is $60 million and allowance is made for "advance awards" from the next three successive years' funding (30 percent of the first successive year, 20 percent of the second successive year and 10 percent of the third successive year

OHIO

Gov. John Kasich signed legislation (HB 508) that doubles the 25-35 percent refundable film tax credit funding to $40 million for the fiscal biennium beginning on or after July 1, 2011. There is a $20 million cap for the first year of the biennium. The project cap remains at $5 million

ILLINOIS

Gov. Pat Quinn signed legislation (SB 1286) that expands the film production incentive to include "accredited animated productions" commencing on or after July 1, 2010, but credits may not be claimed for a taxable year ending prior to December 31, 2012

TEXAS

The Texas legislature allocated 95 million for The Texas Moving Image Industry Incentive Program

UNITED KINGDOM

The British government formally appointed the British Film Institute to be the certification body for the proposed tax credit system for animation, high-end TV and video games.

The U.K. Tax Credit for high-end television, animation, and video games went into effect April 1,

CANADA – Saskatchewan

Eliminated film incentive program

GERMANY

The State Minister for Culture and Media secured an additional €10 million annually for the German Federal Film Fund. The increase brings the DFFF annual budget to approximately $90 million (€70 million) to support productions that shoot locally. The funding increase follows the European Commission's approval to extend the DFFF through the end of 2015.

MAURITIUS

Mauritius launched a 30 percent film tax incentive.

CROATIA            

The funding for the new Incentive introduced in March 2012 is set at €5,900,000

UNITED ARAB EMIRATES - Abu Dhabi

The new 30 percent rebate came into effect September 2012. Guidelines, forms, FAQ and a glossary are provided on the Film Commission's website. While there is no local crew requirement, every project receiving the rebate will have an obligation to offer training and intern opportunities during local filming

MALAYSIA

The Malaysian government recently enacted a 30% cash rebate for foreign film and television productions that spend a minimum of MYR 5,000,000 (about $1.6 million), inclusive of postproduction, in the country. For local projects, the minimum is MYR 2,000,000. Additionally, the minimum spend for the post-production rebate is MYR 1,500,000 (about $480,000)

COLOMBIA

Colombia launched a new 40 percent location filming incentive. The program is available for features and television movies that spend $500,000 locally. In addition to the 40 percent rebate on production expenditure, producers can also claim a 20 percent rebate on accommodations, food, and transportation costs incurred locally. The Colombian government has earmarked about $14 million USD for 2013

LITHUANIA

Lithuania has introduced a 20 percent tax rebate for film production