Production Incentives Update: August 2023
In this post, learn about recent changes to production incentive programs across the US in Alabama, California, Colorado, Missouri, Ohio and Tennessee, as well as internal changes to the incentive in Thailand.
UNITED STATES JURISDICTION UPDATES
Senate Bill 299, enacted by the state legislature and signed by the Governor, modifies the Entertainment Industry Incentive Act of 2009 by establishing a sunset date of December 31, 2028. The bill is effective on September 1, 2023.
Alabama offers a refundable tax credit on qualified expenditures for productions filmed in the state.
The next application window for California's Film & TV Tax Credit Program is scheduled for September 5-7, 2023, for Recurring and Relocating TV projects, and September 11-13 for New TV projects with an October 9 approval date.
California offers a 20-30% tax credit on qualified expenditures for productions filmed in the state.
House Bill 1309, passed by the state legislature and signed by the Governor, amends the film incentive program. The bill restructures the program from a cash rebate into a refundable tax credit for production commencing on or after January 1, 2024. Additionally, the bill allocates $5M for the incentive program. Both out-of-state and Colorado-based production companies are eligible for a 20% base credit. However, specific spending thresholds exist: a Colorado production company must incur a minimum of $100K, whereas an out-of-state company must exceed $250K in expenses. If filming occurs in underserved or rural regions of the state, the base credit increases from 20% to 22%. To qualify for the tax credit, productions must ensure that at least 50% of the cast and crew hold Colorado residency.
The Governor has signed Senate Bill 94 reinstating the Missouri Film Tax Credit Program. The bill creates a transferable tax credit with a sunset date of December 31, 2029. The base credit is 20%, and up to 40% with qualifying uplifts. Productions can be awarded 5% uplifts if each of the following conditions are met: 1). If at least 50% of the project is filmed in Missouri, 2). If at least 15% of the project occurs in a rural area, 3). If the script positively markets the state, and 4). If at least three departments hire a Missouri resident who is prepared to progress to the next level in a specialized craft or acquire a new skill set.
The bill allocates $16M annually for eligible productions, encompassing feature films, TV series, commercials, standalone visual effects, and post-production. In order to qualify for the credit, productions are required to hire a certain number of apprentices or veterans depending on their direct qualified production expenditures. Productions under 30 minutes have a minimum spend threshold of $50k, and productions over 30 minutes have a spend threshold of $100K. Projects must display a logo in the credits indicating that the production was filmed in Missouri. Wages paid to ATL individuals are limited to 25% of the overall qualifying expenses. The bill is effective on August 28, 2023.
Last month the Governor signed House Bill 33 amending the Ohio Motion Picture Tax Credit. The bill increases the current annual cap of $40M to $50M, with a specific allocation of $5M for Broadway theatrical production. Applications are reviewed and awarded annually during two rounds; each round will award $22.5M of the annual $50M plus any rollover amount from the previous period.
Ohio offers a refundable tax credit on qualified expenditures for productions filmed in the state.
House Bill 1545, passed by the state legislature and signed by the Governor allocates $8.5M to the Tennessee Film and Television Incentive Fund for fiscal year 2024.
Tennessee offers a grant on qualified expenditures for productions filmed in the state.
INTERNATIONAL JURISDICTION UPDATES
To incentivize more international productions to film in Thailand, the Government has adopted Ministerial Regulation 387. The regulation states that from August 2, 2023, to July 31, 2028, foreign actors who derive income from international Production in Thailand will be exempt from the personal income tax.