Tax Incentives for Filmmakers

Independent Filmmakers should not overlook tax incentives, per state, when deciding the location for their film. Many states offer some form of tax incentive, allowing the filmmaker to reduce their budget by giving incentives for their productions. Some states even offer up to 20% tax incentives, giving filmmakers plenty of reason to choose their state for the film production.

Daryl Goldberg wrote in his article, on the Mastering Film website, that “most productions do not film anything without taking advantage of some kind of tax incentive program” – that is how important these tax breaks have become.

Many new independent filmmakers may not realize that tax incentives could enhance their budget by 20% to 50%.

Tax incentives can come in different forms. From rebates or refunds, tax credits or transferrable tax credits. The rebate is seemingly the most attractive, as it is an actual check from the state where the incentive is given. Tax credits reduce tax liability owed to the state and transferrable tax credits can be sold to a 3^rd party for a sum, which would be actual money, but at a lower rate than the tax credit itself.

Knowing the difference between the types of tax credits and the guidelines is very important. Having the information before you begin production is mandatory. Missing deadlines or applying too late may mean no tax incentive. This could be disastrous if counted on in the production budget. A good rule of thumb would be to investigate in the very beginning of production, before any hard and fast decisions are made. Preparation and planning are the keys to success for tax incentives.

Good News for Colorado

Last Friday, May 18^th, history was made when Governor Hickenlooper signed into law, HB 12-1286, a bill that allows more tax incentives for film producers in Colorado. For years the Colorado Film Commission has been seeking to increase the state’s tax incentives from 10% to a higher rate, but were not able to move pass the House vote.

CBSlocal.com states that film production in Colorado has been nearly non-existent due to the lack of tax incentives offered from the state in the past. Changing the tax incentives will increase revenue for the state and lure filmmakers to the state that has “everything else”. Donald Zuckerman left Hollywood to become Colorado’s Film Commissioner. He has pushed for this bill to be passed, in hopes of bringing in more jobs and revenue to Colorado. He is certain they will come now that the tax incentives are in place and the new loan program, which no other state offers, is presented. Colorado will guarantee a loan up to 20% to producers, for an approved film project.

Many people are very excited about these changes in Colorado and I am on of them! This opens new doors of opportunity for filmmakers and gives Colorado the hope of a better economy.  I look hopefully to the future of Colorado’s film initiative and see many new possibilities coming to life. Yay, Colorado!!