Massachusetts

Register the production company with the Massachusetts Secretary of State’s office and the Department of Revenue; meet the minimum qualified spending requirement of $50,000 within a 12-month period for the preproduction, production, and postproduction of a qualified production; and submit a 940 Certification, dated no more than ninety days prior to the date being furnished to the Department of Revenue, confirming payment of the requisite unemployment taxes. In order to include spend and all payroll, without limitation, in the incentive calculation, the in-state production expenses must exceed 75% of the total production expenses or at least 75% of the total principal photography days must take place in Massachusetts.

Qualified spend includes resident and nonresident labor sourced to Massachusetts; all direct production expenditures incurred in Massachusetts; and goods acquired from out-of-state vendors and used in Massachusetts. If a production meets the 75% spend test and/or the 75% principal photography test and an individual earns more than $1 million, then 100% of those salaries is included in the 25% production spend credit, rather than in the payroll credit. Salaries, wages, and all payments made to loan out companies must reflect Massachusetts withholding tax in order to qualify. Withholding at the rate of 5% is required on all payments made to a loan out company.

This program is administered on a first-come, first-served basis. Massachusetts offers a unique incentive in that you can elect to claim the credits as either a refundable tax credit equal to 90% of the face value (guaranteed) or sell them at the market rate to a third-party. A taxpayer that elects to receive a refund of the credit from the state must file an electronic tax return for the tax period at issue. The Commissioner will apply the credit against the taxpayer’s liability as reported on its tax return and then refund 90% of the balance of the credits to the taxpayer. Productions should secure the required information and signatures needed to complete the Loan Out Affidavit sooner rather than later in the production process.