Do most states currently offer Movie Production Tax Incentives?
Tax Professional Answers
While the applicable qualifying production activities vary from state-to-state many common qualified production activities include, but are not limited to, feature films, television series, relocated television series, television pilots and television movies. Furthermore, the structure, type, and size of the incentives vary from state to state. Many MPIs include tax credits and exemptions (e.g., sales and use tax exemptions, lodging exemptions, etc.) while other state incentive packages include cash grants, fee-free locations amongst many other benefits.
It should be duly noted that there are now approximately 40 states that offer MPIs with most being either transferable (e.g., transferable credits allow production companies that generate tax credits greater than their tax liability to sell those credits to other taxpayers, who then use them to reduce or eliminate their own tax liability) or refundable (e.g., refundable credits are such that the state will pay the production company the balance in excess of the qualified expenses).
It is critical to design and implement a sustainable methodology that will incorporate all applicable multi-state MPIs to properly tax effect the cost of filmmaking within the United States. As a direct result of these advantageous MPIs, the new expression in the entertainment industry will be – “Lights, Camera, Action and Tax Cut!”
Please send a message to Peter J. Scalise, Federal Tax Credits & Incentives Practice Leader for Prager Metis CPAs, LLC for a complimentary consultation if you are contemplating a movie studio or television filming project and would like to consider the benefits of movie production tax incentives. www.taxconnections.com/profile/Peter-J-Scalise/12259077
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