William L. Baker, Writer
HERITAGE FILMWORKS INC.
State Film Incentive Programs
by W. L. Baker
Filming in the right location can add finances to your films bottom line
Film investors can now benefit from State Tax Credit Incentive Programs. These programs are offered on a state by state basis. Most states have established a Film Production Office that are very involved in the Tax Credit Incentive programs. In most states this is where your application for these credits will begin. The incentives for film production vary from state to state. Plenty of initial research is available.
We've chosen to film our up-coming production in the state of Georgia for purely budgetary reasons. Georgia issues one of the highest tax credits among the states offering tax-credits for filming.
Most of the incentive programs issue the Tax Credits at the completion of filming for the productions that qualify for these programs. Some states have additional benefits that may suit your production and can actually add cash to your productions budget. Interestingly our research should that in some states restrictions do apply.
These tax -credits are solvent. That means they're worth money. And lots of it. Most incentives are returned by Tax Credits to the film production company. However others are sold. Primarily the producers of the film have the right to sell all their tax-credits at any time they wish. What this means is....well, they're worth money. Tax-credits can be sold to private investment firms. Doing so can return immediate cash to the production company if handled properly. However it is important to remember that just like everything else in the world of film, it's all in the details of the planning. If you crunch your numbers and nail your estimated expendetures for the area where you intend to film your production, in the end you will have a very valid figure upon which to base your Estimated Tax-Credit on. Be sure and consult a professional like Tax-credit LLC. But if you've just got to shoot there, call the local Film Office for the State they will ship you all the information that will get you started. The turn around for the tax credits to land in the hands of the production company is generally within six months of the close of filming or sooner. Private firms purchase these tax-credits in advance. Proper calculation of your production schedule can put much needed start up funds in your hands during pre-production. Critical factors to be considered are your start date, how long you will be filming and when you will wrap it all up.
Production companies that use these credits for cash may then cover initial investment capitol gain, obtain matching funds and thereby guaranteeing the investors capitol return. All done prior to receiving any box office receipts or hearing, sound, check the gate, and, Action! If the invested amount is within or below the percentage of the tax credit the investor’s principal return is guaranteed.
Potential locations for filming that offer these incentives are worth studying. The benefit to location centers where filming is to take place is enormous. Film Production expenditures generally far exceed the minimum amount necessary to qualify for these state tax-credit incentives. In addition purchasers of the incentive tax-credits are eager to do business.
Simply put, tax-incentive programs in addition to a film-completion bond remove any risk of no return for the Film investor. Investors interested in putting their money behind a film-production should be sure that the production company has the intent of using these tax incentive programs to aide in the completion their film.
W. L. Baker
CEO Heritage Filmworks, Inc.
