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PRODUCTION INCENTIVES

PRODUCTION INCENTIVES. Presented By: Nicole Ameln. September 10, 2013. Presented at:. WJCT Studios. Types of Production Incentives.

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PRODUCTION INCENTIVES

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  1. PRODUCTION INCENTIVES Presented By: Nicole Ameln • September 10, 2013 Presented at: WJCT Studios

  2. Types of Production Incentives • Refundable Tax Credits These credits are refunds provided by the Tax Authorities once the Production Company has filed an income tax return. The refundable credit consists of excess production credits remaining after all income taxes are paid, and are received regardless of owing any income tax liability. • Transferable Tax Credits These credits are non-refundable tax credits. If not used to offset the Production Company’s income tax liability, the Production Company is allowed to sell the tax credits directly to local taxpayers, or indirectly through brokers. • Rebates Rebates are funds paid to the Production Company directly from the respective film office, are typically not administered by the Tax Authorities, and are not processed through income tax returns.

  3. Production Incentives Interactive U.S. Map

  4. Rebates/GrantsAR, CO, DC, ID, ME, MN, MS, OK, OR, SC, TN, TX, UT, VA, WA, WY • Tax Credits • RefundableHI, LA, MA, MD, MT, NM, NYS, NYC, NC, TN, WI • TransferableAK, CA, CT, FL, GA, IL, LA, MA, MO, NJ, PA, RI, PR, WV • Non-Refundable and Non-Transferable CA, KS

  5. Key U.S. Jurisdictions • Alabama • Type of Incentive: • Refundable tax credit • Maximum Benefit: • 25% of qualifying local spend and nonresident labor; • 35% of resident labor • Project Criteria: • Minimum spend $500,000 • Qualifying Compensation: • ATL – Residents & Non-Residents • BTL – Residents & Non-Residents

  6. Key U.S. Jurisdictions • Alabama (cont’d) • Caps: • Per project cap of first $20,000,000 of Alabama spend; • Annual cap of $15,000,000; increasing to $20,000,000 October 1, 2014 • Sunset/Review: • None • Recent Productions: • Southern Crackers, pilot – Baltic Tigers • Mom’s Night Out, feature – Signal Hill Productions • Tokarev, feature – Hannibal Pictures

  7. Key U.S. Jurisdictions • California • Type of Incentive: • Non-refundable, non-transferable (except for “independent films” or transfers to affiliates) income tax credit (with 5-year carry forward) or sales and use tax credit (with 5-year carry forward) • Maximum Benefit: • 20% of qualifying local spend in the case of qualifying features, MOWs, miniseries, and new television series for basic cable; 25% of qualifying local spend for qualifying “relocating” television series and “independent films”

  8. Key U.S. Jurisdictions • California (cont’d) • Project Criteria: • ≥75% of the production days or total production budget within the state; budget between $1,000,000 and $75,000,000 - feature films/$10,000,000 - independent film; minimum spend of $1,000,000 for new television series and $500,000 for MOW. No minimum spend for relocating TV series. • Qualifying Compensation: • BTL – Residents & Non-Residents • Caps: No per project cap, $100,000,000 annual cap • Sunset/Review: • June 30, 2017

  9. Key U.S. Jurisdictions • Florida • Type of Incentive: • Transferable tax credit (one transfer to 2 transferees, 5-year carry forward) • Maximum Benefit: 30% made up of the following: • 20% of qualifying spend (including digital media projects), with 5% bonus for "off season" projects and 5% bonus for "family-friendly" projects and/or filming within an underutilized region. Additional 5% on stage expenses if ≥50% principal photography filmed at a qualified facility. 15% to hire FL students. • Project Criteria: • ≥ 60% of cast and BTL crew must be residents; • Minimum spend: general $625,000, comm./music $100,000, ind./em. mkt $100,000.

  10. Key U.S. Jurisdictions • Florida (con’t) • Qualifying Compensation: maximum of $400K per person • ATL – Residents • BTL – Residents • Caps: • Per project cap of $8,000,000 film; $500,000 comm./music; $125,000 ind./em. Mkt. • Program cap of $296,000,000 through June 30, 2016 • Sunset/Review: • June 30, 2016 • Recent Projects: • Burn Notice, Season 7 – Fox Television Studios • The Glades, Season 4 – Fox Television Studios

  11. Key U.S. Jurisdictions • Georgia • Type of Incentive: • Transferable tax credit (one transfer to one or more transferees, 5-year carry forward) • Maximum Benefit: • 20% of the "base investment" in the state, plus 10% if the production includes a "qualified Georgia promotion” • Project Criteria: • Minimum local spend = $500,000 • Qualifying Compensation: • ATL – Residents & Non-Residents • BTL – Residents & Non-Residents

  12. Key U.S. Jurisdictions • Georgia (cont’d) • Qualifying Compensation: • ATL – Residents & Non-Residents • BTL – Residents & Non-Residents • Caps: • None • Sunset/Review: • None • Recent Productions: • The Hunger Games: Mockingjay, feature – Lionsgate • Spongebob Square Pants, feature – Paramount • The Internship, feature - Fox

  13. Key U.S. Jurisdictions • Hawaii • Type of Incentive: • Refundable tax credit • Maximum Benefit: • 20% of qualified costs on Oahu or 25% on the other islands • Project Criteria: • Minimum local spend is $200,000; • Make reasonable efforts to hire local talent and crew; • Provide evidence of contributions (financial or otherwise) towards the furtherance of local film, TV and digital media industries

  14. Key U.S. Jurisdictions • Hawaii (cont’d) • Qualifying Compensation: • ATL – Residents & Non-Residents • BTL – Residents & Non-Residents • Caps: • Per project cap of $15,000,000; • No annual cap • Sunset/Review: • December 31, 2018 • Recent Productions: • The Descendants, feature – Fox Searchlight

  15. Key U.S. Jurisdictions • Louisiana • Type of Incentive: • Fully transferable and partially refundable tax credits; can be transferred to the state of Louisiana for 85% of face value • Maximum Benefit: • 30% of qualifying local spend, including the payroll for residents and nonresidents, plus 5% of resident payroll up to the first $1,000,000 for each resident • Project Criteria: • Minimum local spend > $300,000

  16. Key U.S. Jurisdictions • Louisiana (cont’d) • Qualifying Compensation: • ATL – Residents & Non-Residents • BTL – Residents & Non-Residents • Caps: • None • Sunset/Review: • None • Recent Productions: • American Horror Story 3, series – Fox • When the Game Stands Tall, feature – Mandalay • Bonnie and Clyde, mini series - Sony • Fantastic Four 2, feature - Fox

  17. Key U.S. Jurisdictions • Michigan • Type of Incentive: • Cash Rebate • Maximum Benefit: • 27% of local spend • 32% of resident labor • 20% of nonresident BTL • 27% of nonresident ATL • AND • An additional 3% on local spend and resident labor if incurred at a qualified facility or post-production facility • Project Criteria: • Minimum local spend of $100,000; • Film Office has discretion to approve a project based on a number of factors.

  18. Key U.S. Jurisdictions • Michigan (cont’d) • Qualifying Compensation: • ATL – Residents & Non-Residents • BTL – Residents & Non-Residents • Caps: • No per project cap; • Labor is capped at the first $2,000,000 of each person • $50,000,000 annual cap • Sunset/Review: • September 30, 2017 • Recent Productions: • Batman, feature – Warner Bros.

  19. Key U.S. Jurisdictions • Mississippi • Type of Incentive: • Cash Rebate • Maximum Benefit: • 25% of local spend and nonresident labor; 30% of resident labor; plus an additional 5% for veterans • Project Criteria: • Minimum spend of $50,000 • Qualifying Compensation: • ATL – Residents & Non-Residents • BTL – Residents & Non-Residents

  20. Key U.S. Jurisdictions • Mississippi (cont’d) • Caps: • Per project cap of $10,000,000; • Labor is capped at the first $5,000,000 of each person • $20,000,000 annual cap • Sunset/Review: • June 30, 2016 on rebate for nonresident only • Recent Productions: • Batman, feature – Warner Bros. • The Help, feature – Dreamworks • Walk the Line, feature - Fox

  21. Key U.S. Jurisdictions • New Mexico • Type of Incentive: • Refundable tax credit • Maximum Benefit: • 25% of qualifying local spend; an additional 5% bonus for qualified television series; an additional 5% bonus on resident crew labor expenses and fringe benefits, excluding performing artist compensation, if shooting requirements in a qualified production facility in New Mexico are met • Project Criteria: • No minimum spend;

  22. Key U.S. Jurisdictions • New Mexico (cont’d) • Qualifying Compensation: • ATL – Residents & Non-Residents (Talent & Stunt ONLY) • BTL – Residents • BTL – Non-Residents (Special “Employee” Rules) • Caps: • No per project cap; • Resident & nonresident Talent and Stunt are capped at $20,000,000 in the aggregate; • $50,000,000 annual cap • Sunset/Review: • None • Recent Productions: • Lone Ranger, feature – Disney • Breaking Bad, series - Sony

  23. Key U.S. Jurisdictions • New York • Type of Incentive: • Refundable tax credit • Maximum Benefit: • 30% of qualifying production local spend (facility, location, and post-production costs) or 30–35% of stand-alone qualifying post-production spend; Beginning Jan 2015 an additional 10% for services performed in certain counties outside NYC area • Project Criteria: • With the exception of an independent film or pilot, at least 10% of total principal photography must occur on a stage and for location costs to qualify, at least 75% filmed in NYS or $3,000,000 spent on stage costs

  24. Key U.S. Jurisdictions • New York (cont’d) • Qualifying Compensation: • No ATL • BTL – Residents & Non-Residents • Caps: • $420,000,000 annual cap • Sunset/Review: • December 31, 2019 • Recent Productions: • The Tonight Show, series – NBC • Spider Man 2, feature - Sony

  25. Key Jurisdictions • Puerto Rico • Type of Incentive: • Transferable film tax credit (unlimited carry forward and transferees) • Maximum Benefit: • 40% of qualifying local spend and resident labor; 20% on payments to nonresidents • Project Criteria: • Minimum local spend ≥ $100,000; ≥ 50% of principal photography must be local for development expenses to qualify

  26. Key Jurisdictions • Puerto Rico (cont’d) • Caps: • No per project caps; $50,000,000 annual cap can be increased by the Government when expenses incurred in a Film Development ZoneSunset/Review: • June 30, 2018 • Recent Productions: • Pirates of the Caribbean, feature – Disney • Fast Five, feature – Universal • Teen Beach Movie , MOW - Disney

  27. Production Incentives Caribbean

  28. Key Jurisdictions • Dominican Republic • Type of Incentive: • Transferable tax credit (additional incentives for local content and related investments) • Maximum Benefit: • 25% of qualifying local spendProject Criteria: • Minimum local spend ≥ US$500,000; bundling of projects by single owner permitted; foreign productions require a minimum participation of resident labor: 10% (first three years), 20% (next two years) and 25% (in the sixth year of enactment); the Directorate General of Film (DGCINE) can reduce the requirement if DO residents/nationals unavailable

  29. Key Jurisdictions • Dominican Republic • (cont’d) • Caps: • None • Sunset/Review: • None • Recent Productions: • Fast and Furious, feature - Universal

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