It’s been a busy legislative season across the United States, and new production incentives programs are leading to exciting results. By adding buckets of cash to programs (practically begging filmmakers to consider fresh stomping grounds), states have delivered the entertainment business a multitude of incentive opportunities that have never been seen before.
Many states saw policy upgrades and fresh funding to boot. To help you navigate through all this new information, Ryan Broussard (Media Services’ entertainment tax incentives expert) dove into all the latest changes and newest contenders below. Read our full blog or pick a specific state to learn more!
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Brand New Production Incentives We Can’t Pass Up
Many new states landed on the production incentives map this year, with competitive programs vying for production spend. Some of these programs may soon prove to be key players.
Arizona Is Ready for Its Close Up
Arizona is back in a big way, with a new fully refundable credit. The state’s program kicks off in January 2023 with a whopping $75 million in funding. That number will increase to $100 million in 2024 and $125 million in 2025.
The program is structured in tiers, offering more rewards when productions spend more, starting with a 15% return across the board for projects costing $10 million and under, with a 2.5% bonus for utilizing resident cast and crew. More expensive productions will max out with a 20% baseline return, plus a 2.5% boost for hiring Arizona residents. The state will also offer several bonuses to productions that use local facilities.
Keep checking this space for more details as the state continues to flesh out its new program. Legislators and creatives alike are aiming to make Arizona a major player on the West Coast.
Delaware Dips a Toe in the Production Incentives Bay
Delaware is finally in the production incentives game, testing the waters with a pilot refund-based program. The state has allocated $1 million toward refunding upwards of 30% for any preproduction, production, and postproduction work that occurs in the state.
So which films get the refund? That will be decided on a case-by-case basis. While Delaware’s pot of money isn’t huge right now, success could very well lead to growth.
Indiana Brings Production Home
Indiana’s new production incentives program is built on a non-transferable, non-refundable credit. Productions can only take advantage of this 30% tax incentive if it’s domiciled or incorporated in Indiana. Additionally, the credit can only be used to offset your production’s in-state tax liability.
This move demonstrates that the state is looking to appeal to producers seeking long-term commitments to the Hoosier state.
Nebraska Supports Local Film
Nebraska certainly made a good first impression this year, with a 20% grant designed exclusively for resident filmmakers making features and episodic content. To qualify for the grant, the state requires filmmakers to spend a minimum of $1 million.
The program might be in its infant stages, but it’s finally on the map and ready for testing. Local filmmakers unite!
West Virginia Is Almost Heaven for Filmmakers
West Virginia’s new uncapped transferable credit is really turning heads! Legislators delivered an impressive program with the hopes of attracting a new industry. A production need only spend $50,000 in West Virginia to earn a very generous 27%—31% tax credit across all qualifying categories, including local spend, non-resident, and resident labor.
This exciting new program may prove to be a serious contender for production incentive-seeking producers looking to take advantage of West Virginia’s beautiful landscapes. For some time now, the state has been working to design a program that will lead to big success. This year, they have it.
The program is still developing, and we’ll track changes as they happen. If you have any questions, give us a shout and we’ll get you fixed up!
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Incentives Programs That Are Back and Better Than Ever
This collection of states has maintained and/or enhanced their own production tax incentives to benefit production’s bottom line and increase potential returns.
Arkansas Production Incentives Provide Options
While Arkansas maintains a 20% rebate program across all spend types, the state made an interesting move this year to increase investment and bolster returns. Recently, legislators greenlit a transferable credit that mirrors their rebate program. Furthermore, they added 10% bonus incentives for productions employing honorably discharged veterans as well as those utilizing local businesses owned by honorably discharged veterans.
Illinois Looks Above-the-Line
Illinois maintains one of the strongest (and busiest!) transferable credit programs in the country, with its 30% return on resident labor and expenses. It’s gotten even stronger, as certain key above-the-line and below-the-line non-resident wages now qualify for the credit. Plus, up to four non-resident actors can qualify based on the size of your budget.
Say Aloha to Hawaii Production Incentives
Hawaii has long been a favorite location for filmmakers, thanks to its exotic geography and colorful culture. And with a 20—25% refundable tax credit available to productions, the state is a true paradise for filmmakers.
Starting in January of 2023, the production incentive is getting even sweeter with a boosted return in the range of 22—27% (depending on which island a production chooses). Plus, Hawaii increased their project cap to $17 million.
With these increased benefits comes a new rule: productions must withhold taxes (GET tax) for loan-out corporations.
Maryland Wants Your Series
Maryland added a 2% bonus to their already-lucrative 25% across-the-board production incentive for television productions. Legislators increased the refundable tax credit’s annual funding cap to $17 million and implemented an $8 million per-project cap.
With increased funding, the state plans on backing more independent projects and traveling Broadway shows.
Minnesota Incentivizes Big Budgets, Plus Local Stacking
Minnesota kept their rebate program intact and added a transferable tax credit option for larger projects. At nearly $5 million in funding, the program will return 25% on local spending and labor.
The state will maintain that 25% figure for above-the-line non-residents working in the state, provided a production spends a minimum of $1 million on locations.
Furthermore, Minnesota has a slew of new local production incentives. The Iron Range Regional Grant and the St. Louis County Rebate can both be stacked on top of the state’s offering. That’s a great deal for filmmakers!
New Jersey Embraces Digital Media
New Jersey has quickly become one the most popular production states in the country, offering a tremendous 35% transferable credit on all in-state wages and 30% on expenditures.
The Garden State’s production incentive program now targets digital media production as well. While this type of content isn’t typically prioritized (or even recognized in some places), New Jersey is all in on new media. Their transferable credit now has an annual cap of $100 million. There are also rumblings of a forthcoming percentage increase for the state’s diversity bonus.
GET HELP WITH YOUR W2 PRODUCTION PAYROLL HERE.
New York Takes a Bigger Bite of the Incentives Apple
New York has long been a major production hub for independents and series, and now, the Mayor’s Office of Media and Entertainment (MOME) has successfully organized state production incentives into separate programs to handle the influx of productions—a feature, commercial, and postproduction program.
This year, the Empire State is looking to the future of content and leading the country with a digital gaming media program. At a solid 25% return, this credit incentivizes local spending and all below-the-line wages. Starting in 2023, all programs will require an executable diversity plan to qualify for their refundable credit.
New York will also kick in extra percentage points when filming upstate (a trend that has become quite popular). Like in Minnesota, a local production incentive offered by Onondaga County can be stacked on top of the state’s offering. The county, which includes Syracuse, maintains a 25% rebate for resident labor and in-county spend (kicking in an additional 5% for hiring crew members from underrepresented communities).
Double Down in Oklahoma
Oklahoma returns with a reinvented rebate program. Legislators drastically increased program funding to $30 million a year and made earnings potential dependent on location. They offer a 10—20% baseline return on local spending and wages. Loan-outs can register to qualify. Nonresident wages garner a 7.5% return.
Pay special attention to bonuses in the state, as they lead the country. Bonuses incentivize specific subsections of the entertainment business, from those for TV and music to local facility usage and county-specific ones.
The Cherokee Nation made headlines in April with their own film tax incentive program—the first tribe in the nation to do so. Their program aims to increase Native American representation on screen and behind the scenes with hefty production incentives that can be stacked on Oklahoma state incentives. If you’re headed to to the state, don’t miss this opportunity to double down. Read our breakdown of the Cherokee Nation’s new incentive program for more.
Hit the Trail to Oregon
Oregon is building on their already-solid program with some exciting changes. Qualified local spend has jumped to a whopping 25% return, backed by a well-funded rebate program. Incentives on wages paid in Oregon doubled from 10% to 20%. Combine that with their 6.2% labor reimbursement and your production’s return will look nice and healthy. And don’t miss out on regional bonuses that aim to take filmmakers beyond city boundaries.
Tennessee Boosts Funding
Tennessee decided to keep their grant program and gave it a slight boost with $2.2 million in additional funding. The state also created a nontransferable, nonrefundable payroll tax credit to supplement the grant. The credit can return as much as 40—50% on resident and nonresident wages.
This specific type of credit is only redeemable on a domiciled production company’s state tax liability, thought you do have the unique option to “team up” with a local Tennessee production company to navigate around establishing a local company. Plus, the state added a new tax exemption for production.
Washington Eyes Diversity
Washington made strides to make their rebate, funded at $15 million, more accessible and targeted. Legislators added three new bonuses to an already generous 30% return on local spending and resident wages (and 15% on non-resident labor). Productions highlighting underrepresented communities and stories, as well as those filming in rural areas, will take priority.
- 5% for TV series of at least six episodes.
- 10% for filming in rural communities.
- 10% for stories focused on marginalized communities.
Small Changes Worth Mentioning
These states have made smaller changes to budget allocation or rules that are worth knowing about.
California Production Incentives Stay Golden
Hollywood’s home state stands by its production incentives program 3.0, aiming to attract studio shows and independent productions (who must now meet diversity requirements to qualify for their well-funded program). Recently California Gov. Gavin Newsom proposed even more production funding and a program extension.
Colorado Moves Mountains for More Production Incentives Funding
Colorado has quickly added a significant amount of funding to their rebate program, jumping from $3 million to over $11 million.
Georgia Dishes Serious Cash in exchange for an Audit
Georgia continues to reign over the country’s tax incentives programs. Its uncapped return has made it a go-to for an enormous range of productions. You know a program is working when the legislature doesn’t touch return on investment limits, minimum spending requirements, or add an overall cap.
What Georgia did change was its audit requirements and qualification rules. Audits are now a mandatory part of the state’s tax incentive qualification process. Currently, you must perform an audit to qualify for the 30% transferable credit for productions set to receive a $1.25+ million return. Starting in January of 2023, all productions will need to undergo an audit to qualify, regardless of potential return.
Furthermore, rules regarding producer’s fees and pass-through companies have been tightened. Any costs associated with Covid-19 will not qualify for a return.
FOR MORE INFO ON GA AUDIT GUIDELINES, SEE THE FULL GEORGIA FILM INCENTIVE DETAILS HERE.
Massachusetts Wants Creative Commitment
To earn the maximum 25% return on Massachusetts’ transferable partially refundable tax credit, 75% of a film or show’s payroll budget will need to be spent in-state—up from 50%.
Montana Is Big Sky Country for Filmmakers
Montana’s relatively new transferable credit program has been bolstered with an increased annual budget of $12 million per year.
Pennsylvania Declares Increased Funding
State legislators in Pennsylvania have delivered an enormous $100 million funding cap on their transferable credit—a big win for the entertainment business.
Rhode Island Gets Competitive
Rhode Island is getting serious about attracting productions to the state with an annual funding increase of $40 million for their transferable credit.
Utah Production Incentives Soar
Utah has increased program funding to just over $20 million for their refundable credit. $12 million of that funding is reserved for productions filming in rural communities.
Virginia Is for Incentives Lovers
Virginia maintains a unique program with a double-pronged approach. Two production incentive funds help give options to filmmakers: a grant program and a refundable tax credit program. Plus, there are some fantastic tax exemptions for certain in-state spending. Virginia plans to back its grant program through 2024 with incremental increases, starting at $4.15 in 2023 and rising to $5.15 million in 2024.
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