State Film / Entertainment Tax Credits – FAQs

For the Purchaser of Film & Entertainment Tax Credits

1. What is the tax credit and why is it available?

In General:

A tax credit is a dollar for dollar reduction allowed against a tax liability (typically income although no always the case).  Tax credits are offered by taxing authorities (federal, state and local) as a means to incentivize some type of economic development from the private sector.  Many states offer tax credits to film and entertainment companies based on the cost of the production.

In Georgia:

In 2005, Georgia approved the Film Tax Credit to generate revenue and entice film producers to come to the state.  In 2008, Georgia passed O.C.G.A. §48-7-40.26 to further entice film production for the purpose of creating jobs and increasing expenditures in the state.  The production company can sell the credits to raise capital to offset expenses of the production and ultimately lower their budget.  Taxpayers in Georgia can benefit by buying the credits at a discount.

2. What should my tax situation be in order to benefit?

If you are paying income taxes in a state that offers transferable film tax credits, you could benefit.

3. What if I buy too many credits and can’t use them all for the year I thought I would need them?

In General:

We recommend reaching out to one of our Tax Credit Investment Directors regarding a specific states film tax credit program.

In Georgia:

Tax credits can be carried forward five years from the date in which they were established by the seller (production company).  For example, tax credits established in calendar year 2008 may be carried forward until used or until they expire on Dec. 31, 2013.

4. Do you have an example of the return on the investment?

In General:

We recommend reaching out to one of our Tax Credit Investment Directors regarding a specific states film tax credit program.

In Georgia:

5. How does this work on my tax return?

In General:

We recommend reaching out to one of our Tax Credit Investment Directors regarding a specific states film tax credit program.

In Georgia:

We suggest you attach a copy of the IT-Trans which we provide upon closing.  On page 5 of Georgia Form 500, you will list the name of the company that you bought the credits from, the certificate code of the production which we will provide, the federal ID number and the amount of credits.  Use Code 122, which Georgia has assigned to film tax credit (or 133 if digital production).

6. Do I have additional risk of an audit?

In general:

We recommend reaching out to one of our Tax Credit Investment Directors regarding a specific states film tax credit program.

In Georgia:

We have been advised by the State Department of Revenue that no additional risk of audit will apply.

7. Is this legitimate and legal?

In general:

Yes.  These credits are made available by the particular state governments.

In Georgia:

This is a state government program O.C.G.A. §48-7-.40.26.  Our legal and CPA teams are available to discuss.

For the Production Company Generating Film & Entertainment Tax Credits

1. When is the best time to contact Monarch Private Capital? Why?

Contact us once you have decided where to film. We can help assist you with finding strategic business partners like an entertainment attorney and CPA firm, etc. so you can obtain the most credits and save future headaches.

2. What states offer film tax credits and incentives?

Each state that offers film or media tax credits or incentives has different guidelines/rules. See below for states that have a transferable tax credit. Please visit the state’s film office web page for how to apply for the tax incentive.

California – 25% transferable tax credit, 25% relocating TV
California Film Commission
Amy Lemisch,
Director 323.860.2960
[email protected]
www.film.ca.gov

Connecticut – 10-30% transferable tax credit
Office of Film, Television, and Digital Media
George Norfleet, Director
05 Hudson St, 4th Floor Hartford, CT 06106
860.270.8088
[email protected]
www.ctfilm.com

Georgia – 20-30% transferable tax credit
Georgia Film, Music, and Digital Entertainment Office
Lee Thomas, Director
75 Fifth St NW, Suite 1200 Atlanta, GA 30308
404.962.4048
[email protected]
www.georgia.org/industries/entertainment/

Illinois – 30-45% transferable tax credit
Illinois Film Office
Christine Dudley, Director
100 W. Randolph Street, Suite 3-400
Chicago, IL 60601 312.814.3600
[email protected]
www.film.illinois.gov

Massachusetts – 25% Transferable tax credit
Massachusetts Film Office
Lisa W. Strout, Director
10 Park Plaza, Suite 4510
Boston, MA 02116
617.973.8400
[email protected]
www.mafilm.org

Nevada – 12-25% transferable tax credit
Nevada Film Office
Eric Preiss, Director
6655 W. Sahara Ave, Suite C106
Las Vegas, NV 89146
702.486.2711
[email protected]
www.nevadafilm.com

Ohio – 30% transferable tax credit
Ohio Film Office
77 South High Street, 28th Floor
Columbus, OH 43216
614.644.5156
[email protected]
www.ohiofilmoffice.com

Pennsylvania – 25-30% transferable tax credit
Pennsylvania Film Office
Janice Collier, Film Tax Credit Manager
400 North Street, 4th Floor
Harrisburg, PA 17120
717.783.3456
[email protected]
www.filminPA.com

Rhode Island – 25% transferable tax credit
Rhode Island Film and Television Office
Steven Feinberg, Executive Director
1 Capitol Hill, 3rd Floor
Providence, RI 02908
401.222.3456
[email protected]
www.film.ri.gov

West Virginia – 27-31% transferable tax credit
West Virginia Film Office
90 MacCorkle Ave SW South C
Charleston, WV 25303
304.957.9382
www.wvfilm.com

3. What do I need to do to sell the credits?

Our team will assist in the transfer of the credits to the end buyer(s). We will provide the purchase and sale agreement for the transfer of credits to the buyer(s) and effectuate the sale with the prospective state film offices and/or revenue offices. Typically, we will need a CPA review of expenditures or a state audit letter/certificate to issue the credits to buyers.

4. Why MPC?

MPC has a proven process to assure the highest amount of credits and favorable market prices. We help to mitigate risk and future liability. MPC is the largest independent Georgia tax credit company with a long history of selling tax credits. We handle the monetization of the film credit process so you can focus on a successful production.

5. How long is the process of selling the credits?

It depends on your objectives and how many credits you will have. Typically, we are able to sell credits within a two-month time frame.

6. Where can I learn more?

For more information, contact Chrissie Merrill.

STATE FILM / ENTERTAINMENT

Many states offer film & entertainment tax credits to encourage production, expenditure and job-creation within their states.  See which states offer these tax benefits.

STATE HISTORIC REHABILITATION

These credits offer the possibility to offset up to 100% of your tax liability. Also, some states offer abandoned mill tax credits which are similar in nature to historic tax credits.

STATE RENEWABLE ENERGY

Utilizing renewable energy tax credits can improve the environment and your tax liability. Learn more about these types of projects.

STATE AFFORDABLE HOUSING

These credits are awarded to developers of affordable housing projects.  Affordable housing tax credits are dollar–for–dollar credits which act against the individual trust and corporate income tax and, in some states, insurance premium taxes and bank taxes.

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