A few years back it appeared as though every state in our fine Union was scrambling to get some sort of tax incentive or tax credit on its books. The “Runaway Production” (film productions moving to Canada or beyond to save on production budgets) panic that spread across the nation caused state government officials to introduce and fast-track a wide variety of new legislation. The calm after the storm has left a rather muddied landscape with certain states eliminating their programs while some continue to thrive, albeit under the radar.
Most of the existing state film tax incentives require all aspects of production of a film or television production to take place within the state borders. Depending on how much is spent, how it is spent and the type of production, certain states provide incentives that can result in tremendous savings or “free” returns on investment (depending on your viewpoint).
A great chart of the remaining state tax incentives and the applicable requirements can be found HERE.
Coupling the various state tax incentives with the mysterious but enticing Federal Tax Incentive, Section 181 (which still exists) and you can potentially see upward of 50% of your overall investment returned in the form of credits and write-offs.
If your film or television production qualifies for one of these programs you can use it as a great way to entice investors. We don’t have to tell you how hard it is to get financing for independent film projects. Not only do you have to convince people that your film is the one that will succeed, but you have to scare the pants off them by telling them all of the risks and ways they may lose their investment through your investment documents (PPM/Offering). Throwing a few pages in these documents describing the various tax credits and incentives offered by the federal and state governments can be just the thing to get an investor off the fence and into your film production.