What Are the Various U.S. State & Candadian Film Production Tax Incentives?

By Ariel Penn

How Do They Compare? Our List All in One Place

There are different film production tax incentives available for film productions looking to shoot on location in various places across the United States and Canada.

So what are film production tax incentives? Tax incentives for film production are designed to encourage movie producers, directors, and studios to choose certain locations for their work in order to stimulate local economies.

These incentives typically include a tax credit based on certain variables, such as the percentage of local crew on staff or the percentage of film shot in certain economically distressed areas.

The film production tax incentives available by U.S. state and in Canada are decided by the state or province legislature, and as such, these incentives vary wildly from location to location. Keep reading below to find out more about the tax incentives offered by each individual state or country.

Film Production Tax Incentives: Top Tier

The tax incentives offered by the states below are some of the higher levels of tax incentives available for potential film producers. Film production tax incentives are offered as tax credits and fall into the following categories:

  • Refundable tax credit: A refundable tax credit is considered the payment of taxes in the same way that payroll withholding is a tax payment. The amount of refundable credit is subtracted from the overall amount of taxes owed back to the state.
  • Transferrable tax credit: A transferrable tax credit is a tax credit that can be sold, assigned, and transferred to a local taxpayer for non-residents; this allows out-of-state film crews to still receive an in-state tax break.

  • Redeemable tax credit: A redeemable tax credit is similar to a refundable tax credit. With redeemable tax credits, film crews are allowed to accrue tax credits through expenditure and then turn them in at tax time for a reduction of taxes owed.

  • Cash rebate: A tax cash rebate gives film crews incentive to make certain expenditures in exchange for receiving that money back when taxes are due. Film production crews typically re-invest this cash into their production and stimulate local economies.

Tax incentives are also categorized by below-the-line (BTL) and above-the-line (ATL) expenditures. BTL expenditures are costs involved with the general film crew, while ATL expenditures are the costs associated with performers, screenwriters, and other persons of major involvement in the film’s production.

These incentives are very different depending on where film production takes place and typically require independent CPA verification.

For more specific qualifications on tax incentives, film producers are encouraged to contact the film office of the state or region where they plan to shoot in order to confirm the requirements prior to filming.

California

Tax Credit Type: Transferrable
Tax Credit Rate: 25% for qualifying production expenditures; tax incentive will compensate filmmakers for both residential and non-residential costs for below-the-line crew, but not for above-the-line crew.

Canada
Tax Credit Type: Refundable
Tax Credit Rate: 25% qualifying production expenditures

Connecticut
Tax Credit Type: Transferable
Tax Credit Rate: 10% qualifying production expenditures (minimum $100,000) 15% (minimum $500,000), 30% ($1 million)

Georgia
Tax Credit Type: Transferable
Tax Credit Rate: 20% qualifying production expenditures; 10% extra incentives for end credits or other Georgia promotional materials

Illinois
Tax Credit Type: Transferable
Tax Credit Rate: 30% qualifying production expenditures; 15% crew payroll

Louisiana
Tax Credit Type: Redeemable
Tax Credit Rate: 25% qualifying production expenditures; 5% increase in incentives if 60% of production is done outside of New Orleans; 10% increase if the screenwriter is a Louisiana resident; 15% payroll
for residents

New Mexico
Tax Credit Type: Refundable
Tax Credit Rate: 25% qualifying production expenditures (excludes non-residential compensation); 30% residential crew; 15% non-residential crew

Nevada
Tax Credit Type: Transferable
Tax Credit Rate: 15% qualifying production expenditures (excludes non-residential compensation); 5% bonus credit if more than 50% of the film production crew are Nevada residents; 12% for non-residential compensation

New Jersey
Tax Credit Type: Transferable
Tax Credit Rate: 30% qualifying production expenditures (includes non-residential compensation); 35% credit for producing in certain municipalities

New York
Tax Credit Type: Refundable
Tax Credit Rate: 30% qualifying production expenditures; 40% on crew payroll; 35% for post-production expenditures

Ohio
Tax Credit Type: Refundable
Tax Credit Rate: 30% qualifying production expenditures

Pennsylvania
Tax Credit Type: Transferable

Tax Credit Rate: 25% qualifying production expenditures (includes non-residential compensation); 5% additional bonus credit for qualifying production facilities located within Pennsylvania

Puerto Rico
Tax Credit Type: Transferable
Tax Credit Rate: 40% qualifying production expenditures (includes residential compensation); 20% non-residential compensation

Rhode Island
Tax Credit Type: Transferable
Tax Credit Rate: 30% qualifying production expenditures (includes non-residential compensation)

Film Production Tax Incentives: Second Tier

The tax incentives for the locations in this category aren’t as robust as those offered in the top tier category of incentivized locations, but producers who film the locations below can still receive pretty sizeable write-offs on production expenditures.

Alabama
Tax Credit Type: Refundable
Tax Credit Rate: 25% qualifying production expenditures (includes non-residential compensation); 35% compensation on payroll for residential crew.

Arkansas
Tax Credit Type: Cash rebate
Tax Credit Rate: 30% qualifying production expenditures (includes non-residential compensation); 30% on crew payroll.

Colorado
Tax Credit Type: Cash rebate
Tax Credit Rate: 20% qualifying production expenditures (includes non-residential compensation).

District of Columbia (Washington D.C.)
Tax Credit Type: Cash rebate
Tax Credit Rate: 35% taxable expenditures; 21% non-taxable expenditures; 10% non-residential compensation.

Hawaii
Tax Credit Type: Refundable
Tax Credit Rate: 20% qualifying production expenditures (includes non-residential compensation); filmmakers receive bonus compensation for film production occuring outside of Honolulu County.

Kentucky
Tax Credit Type: Non-refundable, non-transferable tax credit
Tax Credit Rate: 30% qualifying production expenditures.

Maine
Tax Credit Type: Cash rebate
Tax Credit Rate: 12% compensation for residential crew; 10% compensation for non-residents; 5% compensation for non-wage production.

Massachusetts
Tax Credit Type: Transferable, redeemable (up to 90% of earned tax credits)
Tax Credit Rate: 25% qualifying production expenditures (includes non-residential compensation).

Minnesota
Tax Credit Type: Cash rebate
Tax Credit Rate: 20% qualifying production expenditures (includes non-residential compensation).

Mississippi
Tax Credit Type: Cash rebate
Tax Credit Rate: 25% qualifying production expenditures (excludes non-residential compensation).

Montana
Tax Credit Type: Cash rebate
Tax Credit Rate: 20% qualifying production expenditures.

North Carolina
Tax Credit Type: Cash rebate
Tax Credit Rate: 25% qualifying production expenditures (includes non-residential compensation).

Oklahoma
Tax Credit Type: Cash rebate
Tax Credit Rate: 35% qualifying production expenditures; compensation for non-ATL crew; 2% additional bonus incentive for the addition of Oklahoma-produced music in the soundtrack.

Oregon
Tax Credit Type: Cash rebate
Tax Credit Rate: 20% qualifying production expenditures (excludes labor costs).

South Carolina
Tax Credit Type: Cash rebate
Tax Credit Rate: 30% qualifying production expenditures (does not include wage or payroll compensation); 25% compensation for residents; 20% compensation for non-residents.

Tennessee
Tax Credit Type: Cash rebate
Tax Credit Rate: 25% qualifying production expenditures (includes residential compensation); 5% additional incentive for scripted television projects; 25% incentive for non-residents in scripted television projects.

Texas
Tax Credit Type: Cash rebate
Tax Credit Rate: 5% for spending in-state expenditures between $250,000 and $1 million; 10% in-state expenditures between $1 million and $3.5 million; 20% in-state expenditures above $3.5 million projects in film and television; 5% in-state expenditures over $1 million for commercials; 2.5% bonus incentive if more than 25% of the project is shot in economically distressed areas.

Utah
Tax Credit Type: Refundable
Tax Credit Rate: 20% qualifying production expenditures (excludes non-residential compensation); 5% additional bonus incentive for film production located in specified rural areas or a high percentage of specified demographics of residential crew

Virginia
Tax Credit Type: Refundable
Tax Credit Rate: 15% qualifying production expenditures; 5% additional bonus incentive for film production located in distressed areas; 25% credit for residential payroll; 35% compensation for residential payroll if the amount of money expended in Virginia exceeds $1 million; 10% additional incentive for each resident on their first film production.

Washington
Tax Credit Type: Cash rebate
Tax Credit Rate: 30% qualifying production expenditures (includes residential compensation); 35% for episodic television production of at least six episodes; 15% for non-residential compensation.