With a relatively low minimum spend of $500k and a competitive refundable tax credit, Alabama has the attention of independent producers weighing their options in “Hollywood South.” The state offers a refundable tax credit of 25% on local spend and non-resident in-state labor. Resident hires garner an even heftier 35% incentive. But why has this program become particularly popular for indies?
When it comes to tax credits, “refundable” is the most liquid: after the production company has filed their taxes with the state and offset their small liability, they will get the remainder of their funds back in full. (As opposed to a transferable credit, where the production typically sells its credit for less than face value.) So while not as profitable as a cash rebate, a refundable credit is still very attractive and easy to monetize for financing purposes.
Caps can help smaller productions
Alabama does have an annual cap of $20 Million, along with compensation caps of $1M for Above the Line and $500K for Below the Line positions… but these limits can be a boon to modest-sized productions, in the sense that they may dissuade the bigger studio projects from coming to town. In fact, without competing against large scale features, an independent project can crew up more easily, get access to more resources and spaces, and can be fairly assured the state’s annual cap won’t be drained by a tentpole movie.
The state’s crew base is solid and growing, in part thanks to the incentive, and any additional out-of-state hires needed can be found in neighboring states like Louisiana and Georgia. Independent productions will find the film office, vendors and the local area very accommodating for shooting. Of course, the beautiful surrounding areas of lush forest, rolling hills and southern homes can fit a multitude of scenarios, while downtown cityscapes are available as well.
Media Services offers complimentary application assistance to its payroll clients and can answer questions regarding tagging budgets for this or any other state. Payroll clients also receive the benefit of free Showbiz Budgeting software, as well as unlimited state comparisons via our incentives calculator.
To get started, visit our film tax incentives page or call 310 471 9381.