A Record Number of US States Expand Filmmaking Incentives in 2022
A significant number of production incentives were boosted this year. States from all regions of the country are expanding their incentives and industry programs to encourage thriving filmmaking communities and grow local economies. To help your production make sense of all the changes, Entertainment Partners has compiled some of these legislative updates so you can determine if your project qualifies, and which states are the best fit.
New Jersey: Senate Bill 4094
The year kicked off with SB 4094 being signed into law, which increased the New Jersey Film & Digital Media Tax Credit Program to 35% in specific counties, and 30% for the rest of the State. The bill also increased the annual limitation on digital media content production tax credits from $10M to $30M.
Also, beginning in FY 2025, the bill allows an additional $100M in tax credits for NJ film-lease partners (e.g., a taxpayer that has made a commitment to lease or acquire all or part of a NJ production facility for a period of five or more successive years, and commits to spend an annual average of $50M of qualified film production expenses over the period of at least five to 10 years).
Illinois: Senate Bill 157
SB 157 was signed into law on April 19, 2022, allowing certain non-resident wages to qualify. Qualifying wages now include non-resident Directors, Writers, Directors of Photography, Production Designers, Costume Designers, Production Accountants, VFX Supervisors, Editors, Composers, and Actors.
- Regarding Actors, on qualified productions spending $25M or less, no more than 2 non-resident actors qualify. For qualified productions spending more than $25M, no more than 4 non-resident actors qualify.
- There is a new $500K Compensation Cap (increased from $100K) on qualified resident and non-resident wages.
In addition, the Illinois Production Workforce Development Fund, administered by the Illinois Film Office, provides grants to qualified training programs with an emphasis on developing employment pathways for minorities and women. Grants will be financed through a tax credit transfer fee.
To learn more about these incentives, and how companies like Chicago-based Cinespace Studios are helping to foster the development of industry in Chicago and across Illinois, watch our recent Master Series webinar featuring Ashley Rice, President and Co-Managing Partner of Cinespace Studios.
New York: NYS Budget/Senate Bill 8009C and Assembly Bill 9009
On April 9, 2022, the NYS Budget & SB 8009C was approved and signed into law, modifying the Empire State Film Production and Post-Production Credit, extending the program to December 31, 2029. Additionally, tax credits issued on or after January 1, 2023 shall be reduced by one-half of one percent.
Also effective January 1, 2023, companies applying for the credit must file a diversity plan with the governor's office outlining specific goals for hiring a diverse workforce.
In addition, AB 9009 was signed, creating a 25% Digital Gaming Media Production Credit. This credit extends through December 31, 2027, and includes:
- Annual Funding Cap of $5M
- Project Cap of $1.5M per year
Georgia: House Bill 1437 & Senate Bill 435
On March 31, 2022 HB 1437 & SB 435 were pushed to 2023. These bills would have capped the program at $900M annually, and changed the 20-30% transferable tax credit to a non-transferable/non-refundable tax credit.
Note, 20% of qualified expenditures include materials, services and labor and any other purchases, rentals, and services need to align with the Georgia vendor rule.
An additional 10% uplift is offered to productions that include the Georgia promotional logo/end title credit or pre-approved alternative marketing promotion in their completed project.
Oregon: House Bill 1524
On March 24, 2022, the passage of HB 1524 increased percentages of the Oregon Production Investment Fund (OPIF) from 10% to 20% on Oregon-based payroll, and 20% to 25% on Oregon based goods and services.
Projects with a minimum spend of $1M can combine the OPIF with the Greenlight Oregon Labor Rebate of 6.2%, for a rebate of 26.2% on Oregon-based payroll.
Guillermo del Toro recently worked with Portland-based Shadow Machine, a stop-motion production company, on his forthcoming film 'Pinocchio'. For a deeper dive into Oregon’s production community and production incentive programs, read our interview with Tim Williams, Executive Director at Oregon Film.
'Pinocchio' (2022) / Netflix
Utah: Senate Bill 49
On March 24, 2022, SB 49 became law, amending the Utah film production incentive program, and granting $12M of funds related to "Rural Productions" (as defined by the Utah Film Office) for fiscal years July 1, 2022 through June 30, 2024. This funding is in addition to the unrestricted funding of $6M for each fiscal year after June 30, 2022.
Qualified productions receive a 20-25% refundable tax credit through this program with the following requirements:
- 20% given for qualified expenditures (i.e., direct production expenditures made in Utah that are subject to Utah taxes), plus
- 5%, if the production company: 1) verifies $1M or more of expenditures were made in the state of Utah; and 2) meets the definition of 'significant percentage of cast and crew from Utah' which shall be no less than 75% of the total in-state hires of cast and crew, excluding extras, and 5 principal cast members, or
- 5%, for a state-approved production in which at least 75% of the total number of production days occur within certain counties.
Note, the maximum Utah Refundable Tax Credit is 25%.
Washington: House Bill 1914
On March 31, 2022, HB 1914 was enacted, increasing funding for the Motion Picture Competitiveness Program to $15M annually with productions receiving a 15% to 35% rebate.
Up to 30% is received on qualified expenses for pre-production, production, and post-production that takes place within the state, with a minimum spend of $500K for film and $300K for TV. There is an additional uplift of 5% for qualified in-state spending for an episodic series with a minimum of 6 episodes.
The incentive program begins accepting applications in Q1 of each year and projects that are fully funded are invited to submit an application to the Washington Filmworks’ Board to review.
Colorado: House Bill 1408
On June 3, 2022, House Bill 1408 modified the Colorado performance-based incentive program for film & television production, expanding it as follows:
- Allows the executive director to authorize the approval or issuance of an incentive in an amount that exceeds the current statutory limit of 20% of qualifying local expenditures · Appropriates $2M to the office of the governor from the Colorado office of film, television, and media operational account cash fund for FY23 (7/1 – 6/30/23)
- Creates a film incentive task force to study how to make the performance-based incentive for film production in Colorado more effective
The funding for the entire program caps at $9.25M.
Pennsylvania: House Bill 1342
Pennsylvania recently finalized their $45.2B budget for 2022-23, increasing the film tax incentive annual cap from $70M to $100M and allocated $5M to “Pennsylvania Film Producers.”
The bill also states that the new $100M cap “shall remain at the amount allocated for fiscal years beginning after June 30, 2022, and ending before July 1, 2025”.
Pennsylvania offers a 25-30% transferrable tax credit which includes the following:
- 25% is allotted for expenditures that include preproduction, production, and postproduction costs. Check out the list of qualified expenditures to see exactly what does and does not qualify.
- 5% is allotted for productions that meet the minimum state filming requirements at a Qualified Production Facility.
Maryland: House Bill 641 & Senate Bill 536
HB 641 created the Theatrical Production Tax Credit Act, which establishes a refundable tax credit equal to 25% of qualified total direct production expenditures for certain theatrical production entities.
- Limits qualifying salary, wages or other compensation to each worker receiving $100K or less per week
- Qualifies resident and nonresident above-the-line and below-the-line labor costs
- Limits the amount of tax credits that may be issued in any one year to $5M per fiscal year (July 1 – June 30)
- Limits the number of credits that may be issued to a single theatrical production to $2M
- Establishes a sunset date of June 30, 2027
Effective July 1, 2022, this act shall be applicable to all taxable years beginning after December 31, 2021, but before January 1, 2027.
Senate Bill 536 amends the Maryland Film Production Activity Tax Credit program by expanding eligibility to include digital animation projects, effective July 1, 2022.
Tennessee: Tennessee Entertainment Commission (TEC) Production Incentive and Senate Bill 2897
On June 1, 2022, SB 2897 was passed, appropriating $2.2M to the Tennessee Film and Television Incentive Fund for the 2023 fiscal year (July 1 – June 30).
Also, on April 12th, 2022, Tennessee's Entertainment Commission, Department of Revenue, and Department of Economic and Community Development announced a new franchise and excise tax credit program. This program is designed to promote job creation and economic development.
The standard credit generates up to 40% on resident and non-resident payroll expenses, with a 10% uplift on payroll expenses for Tennesseans living in economically distressed areas.
Companies approved as a qualified production can apply for a tax credit generated through resident and non-resident Tennessee payroll expenses and apply for a point of purchase sales tax exemption certificate on non-payroll expenses.
Qualified productions include scripted and unscripted television, feature films, video game development, animation, commercials, and audio/visual post-production.
Hawaii: House Bill 1982
In June, HB 1982 was passed amending the Motion Picture, Digital Media, and Film Production Income Tax Credit. A few of these amendments include:
- Increased the tax credit from 20% to 22% for qualified production costs incurred by a qualified production in any county with a population of over 700K residents
- Increased the tax credit from 25% to 27% for qualified production costs incurred by a qualified production in any county with a population of 700K residents or less
- Increased the total tax credits that may be claimed by each production from $15M to $17M
- Reduced the minimum amount of required qualified production expenditures from $200K to $100K
Delaware: Senate Bill 252
On June 30, 2022, SB 252 was signed into law, enstating the Delaware Motion Picture and Television pilot program that will reimburse up to 30% (refundable tax credit) on production, preproduction, or postproduction expenditures incurred.
These expenditures must be directly used in the production of digital entertainment. The program has a funding cap of $1M for the 2023 fiscal year (July 1 – June 30, 2023). Regulations and guidelines for the Motion Picture and Television Refundable Tax Credit pilot program are expected to be released shortly.
Rhode Island: House Bill 7123
On June 27, 2022, HB 7123 became law and modified the Rhode Island Motion Picture Production Tax Credit and Musical and Theatrical Production Tax Credit programs. The annual funding cap for the motion picture production tax credit was increased to $30M for calendar year 2022, and $40M for calendar year 2023 and 2024.
For the Musical and Theatrical Production Tax Credit, the bill amended the definition of “Pre-Broadway production” to include live stage productions performed in qualified production facilities having a presentation scheduled for Broadway's theater district in NYC.
Virginia: House Bill 30
On June 22, 2022, HB 30 was passed, and appropriates $4.15M for the 2023 fiscal year and $5.15M for the 2024 fiscal year (July 1 – June 30) to the Governor's Motion Picture Opportunity Fund. In addition to Virginia’s refundable tax credit program, the Governor's Motion Picture Opportunity Fund offers discretionary grants to production companies and studios.
From workforce development programs to uplifts for filming in economically distressed areas, there are opportunities for all types of productions. So, whether you're an independent producer shooting your first feature or a studio creating the third season of a television series, state officials are working together to increase their budgets to welcome your stories, crew members, and cast. No matter what direction you’re headed, the production incentives team at EP is here to help you navigate questions on these and any of the newest production incentives in other states. Connect with us today and let’s get you on your way to rolling cameras!