THE INCENTIVES PROGRAM - TIP

On July 6, 2022, House Bill 2156 became law without Governor Doug Ducey’s signature, creating the Arizona Motion Picture Production incentives program. Details of the program are as follows:  

• Creates a refundable tax credit on the total amount of qualified production costs that is equal to:
  • 15 percent for a motion picture production company that spends up to $10 million;
  • 17.5 percent for a motion picture production company that spends more than $10 million but less than $35 million;
  • 20 percent for a motion picture production company that spends more than $35 million;
• Allows for additional bumps, as follows:
  • 2.5 percent on below-the-line resident labor costs;
  • 2.5 percent of the total amount of qualified production costs if:
    • The production company uses a qualified production facility in the state to produce the motion picture production; or,
    • The production company films primarily at a practical location, produces and films the project primarily in Arizona and performs ALL preproduction, postproduction and editing at an in-state qualified production facility;
  • 2.5 percent of the total amount of qualified production costs if the production is produced and filmed in association with a “long-term tenant”, as defined, of a qualified production facility;
• Establishes the following amount of tax credits that may be preapproved in each calendar year:
  • 2023, $75 million;
  • 2024, $100 million;
  • 2025 and thereafter, $125 million;
• Limits the amount of tax credits that may be awarded to projects that qualify for the program by filming primarily at a practical location in Arizona, produce and film the motion picture production primarily in Arizona and perform ALL preproduction, postproduction and editing at an industry standard facility in Arizona, if such a facility is available, to $25 million in each calendar year;
• Qualifies resident and nonresident above-the-line and below-the-line labor costs;
• Requirements:
  • To qualify for the program a motion picture must do either of the following:
    • Use a qualified in-state production facility to produce the motion picture production; or
    • If the motion picture is filmed primarily at a practical location, produce and film the motion picture production primarily in Arizona and perform ALL preproduction, postproduction and editing at an industry standard facility in Arizona, if such a facility is available;
  • Maintain the production company’s production labor positions in Arizona;
  • Include in the credits an acknowledgment that the production was filmed in Arizona;
  • Provide an audited statement completed by an in-state certified public accountant; and,
• Establishes a sunset date of December 31, 2043.

 

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On June 30, 2022, Governor John Carney signed Senate Bill 252, creating the Delaware Motion Picture and Television pilot program as follows:  

• Establishes a rebate of up to 30 percent of production, preproduction, or postproduction expenditures incurred in the State that are directly used in a production activity of digital entertainment activity; and,
• Provides for a program funding cap of $1 million for the 2023 fiscal year (July 1 – June 30).

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On June 27, 2020, Governor David Ige signed House Bill 1982 amending the motion picture, digital media, and film production income tax credit as follows:  

• Increases the tax credit that may be earned on qualified production costs as follows:
  • From 20 percent to 22 percent of qualified production costs incurred by a qualified production in any county of the state with a population of over 700,000;
  • From 25 percent to 27 percent of qualified production costs incurred by a qualified production in any county of the state with a population of 700,000 or less;
• Requires every person making a payment to a loan-out company and claiming a tax credit to deduct and withhold an amount equal to the highest rate of tax plus any applicable county surcharge for all payments made to the loan-out company for services performed in the state;
  • The amounts withheld under this section shall be deemed to be a general excise tax withholding for the benefit of the loan-out company performing the service;
• Increases the total tax credits that may be claimed by each production from $15 million to $17 million;
• Reduces the minimum amount of required qualified production expenditures from $200,000 to $100,000;
• Eliminates the requirement for productions to submit a verification review by a qualified certified public accountant when applying for the film production tax credit;
• Requires the state to issue the tax credit certificate to the taxpayer no later than seven months after receipt of the taxpayer’s statement;
• Requires each taxpayer claiming the motion picture, digital media, and film production income tax credit to submit a fee in an amount equal to 0.2 percent of the tax credit claimed by the qualified production; and,
• Extends the sunset date of the program thru December 31, 2032.

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On July 8, 2022, Governor Tom Wolf signed House Bill 1342, amending the Pennsylvania Entertainment Production program as follows:

• Increases annual funding cap from $70 million to $100 million per fiscal year (July 1 – June 30);
• Defines "Pennsylvania film producer" as a Pennsylvania domiciled film production company that meets the following:
  • The principal tax jurisdiction is this Commonwealth;
  • A majority of the taxpayer's owners are Pennsylvania resident;
  • The taxpayer employs fewer than 15 full-time employees; and,
• Establishes the Pennsylvania film producer reserve, allocating $5 million of the tax credits authorized in support of projects produced by a Pennsylvania film producer

This act shall take effect immediately.

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On June 27, 2022, Governor Daniel McKee signed House Bill 7123, modifying the Rhode Island motion picture production company tax credit and musical and theatrical production tax credits programs as follow:
Motion picture production company tax credit  

• Increases the annual funding cap from $30 million for calendar year 2022 to $40 million for calendar year 2023 and $40 million for calendar year 2024;

  Musical and theatrical production tax credit  

• Amends the definition of “Pre-Broadway production” for purposes of musical and theatrical production tax credits to include live stage productions performed in qualified production facilities having a presentation scheduled for Broadway's theater district in New York City within thirty-six (36) months after its Rhode Island presentation rather than the previous period of twelve (12) months.

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On June 1, 2022, Governor Bill Lee signed Senate Bill 2897, appropriating $2.2 million to the Tennessee Film and Television Incentive Fund for the 2023 fiscal year (July 1 – June 30).

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On June 22, 2022, Governor Glenn Youngkin signed House Bill 30 which appropriates $4.15 million for the 2023 fiscal year and $5.15 million for the 2024 fiscal year (July 1 – June 30) to the Governor's Motion Picture Opportunity Fund. These funds are to be used at the discretion of the Governor to attract film industry production activity to Virginia.

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