Colorado (Tax Credit)

Apply PRIOR to beginning significant activities in Colorado; meet the minimum in-state spending requirement for preproduction, principal photography, or postproduction; be prepared to show proof of funding (80%); and see that 50% of the workforce (not including extras, interns, and unpaid employees) is made up of Colorado residents. Loan out companies must be registered with the Secretary of State. For tax years commencing on or after January 1, 2024, state income tax must be withheld at the rate set forth in Section 39-22-104 or 39-22-301 (currently 4.4%) ONLY if 1) the loan out company fails to provide a valid taxpayer identification number or 2) provides an IRS issued taxpayer identification number for nonresident aliens. All payments made to a loan out company must be reported to Colorado DOR on Form 1099, even if state withholding is not required.

Qualified spend includes payments made to an in-state business, including payments for developing or purchasing the story and scenario; and the first $1 million of payments per calendar year per loan out company, and of salaries for each resident or nonresident worker. In order for any salary to be considered a qualified expenditure, Colorado income tax must be withheld or paid by either the production company or the individual. Payments to out-of-state vendors do not qualify.

This program is not administered on a first-come, first-served basis. The film commission has the discretion to determine which projects are selected. Colorado provides a refundable tax credit of 20 – 22% on all local spend (the executive director may authorize the approval or issuance of an incentive in an amount that exceeds the current statutory limit of 20 – 22% of qualifying local expenditures) and the first $1 million of wages for each resident and nonresident. The 22% rate may be earned on projects filmed in a rural community, marginalized urban center, or that use a local infrastructure, while still meeting the other requirements. The minimum spend requirement is based on where the film originates. To originate in Colorado, as of the date of the application for the incentive program, either the production company must be registered with the secretary of state for at least 12 consecutive months and been engaged in production activities in the state for other projects in the past 12 consecutive months OR for a newly formed entity, the “manager” of the business must be a resident of Colorado for at least 12 consecutive months. The incentive may be paid upon completion of the production and verification of the qualified expenditures by a CPA licensed to practice in Colorado or a CPA firm registered in Colorado. Prior to engaging a CPA for the verification, ensure that the CPA has completed the Colorado Film Incentive training with the Colorado Film Production Analyst. If the incentive is erroneously or improperly issued for any reason, the attorney general may recover such amount. The program has a sunset date of December 31, 2034.