Film/TV Tax Incentives and HOW they work
You’re trying to raise financing to film your project, but you might not need as much as you think! (You’ll probably spend more in post than you thought but that’s a different story…) Well, good news – your location will give you money to come film there!
Welcome to the world of location production incentives. What are they? How do they work? And where?
It’s no surprise that it takes a village to film something. Producers, writers, directors, gaffers, caterers, production designers, the list keeps going. Hiring all of these people for your production is good for the economy! Additionally, housing, feeding, transporting, and various production services also boost the economy. So, states (and other countries) will give incentives for you to bring your production to them so their economy is boosted.
Each incentive works a little differently depending on what it is and how it’s structured. But, here are the typical forms the incentives come in:
- Refundable Tax Credits: A credit reduces the amount of tax you owe on expenditures in that location. If it’s a refundable credit, you can actually reduce your tax liability below zero, and get money back.
- Transferable Tax Credits: Your tax credit can be bought and sold by others, potentially turning that tax credit into money for you.
- Rebates: A state/country will refund money to your production for qualified expenditures.
- Grants: A state/country will give money to your production if you meet their criteria.
There are rules on how the money is spent and what is refundable. Here are the main points to look at:
- ATL: Not Atlanta. It’s Above The Line spend, and means the money spent on Above The Line positions (Writers, directors, producers, actors).
- BTL: Below The Line. And means the money spent on Below The Line positions (basically every other position hired on a production).
- Minimum Spend: This is the minimum amount of money you must spend in order to activate the incentive. A minimum spend in California for a film is $1M, so if the budget of your film is $700K, you won’t qualify.
- Max Spend or Cap: Only the amount up to the state or country’s cap qualifies for incentives.
Now that you know all the tricky lingo, let’s find out where your next production is going to be!
There are a lot of states and a lot of countries, so how do you figure out which one has the best option for you? Every year, there is something called the AFCI Locations Show (Association of Film Commissioners International), and film commissioners from all over will assemble in one place. You can go to one of these conferences for free and talk to the lovely people from all over about their incentives. They all want you to come to their state / country so they’re very friendly and might even give you a pen, thumb drive, t-shirt, or even a cookie! (I got chocolate chip, YMMV.)
However, if you like spreadsheets and data like me, you might want to just look at all of the information online and in one place (the only cookies here are the ones for your browser, sadly). EP Financial Solutions put together this map, and have a great tool on their website with all of the information as well.