Production Incentives Update: How 2022 is Shaping Up

Whether they are a financial godsend or a revenue burden to states, production continues to boom because of film incentives and tax credits. However, the challenge for any producer is to stay up to date as incentives are in a constant state of flux… or disappear entirely. This list represents the latest information since our last film incentive post.

The good news is that there are lots of options. Many states have an incentive of some kind to encourage you to shoot your project there. However, applying for a tax credit or incentive can be complicated, especially since every state has different rules and regulations to follow. And not all film incentives are the same…

Film Incentives – Types

While there are five main types of film incentives, they will vary depending on the state.

  • Refundable Tax Credit – Applies only to tax credits. The state will pay the production company in excess of the company’s owed state tax.
  • Transferable Refundable Tax Credit – Can transfer over to a local company so that they can reduce or eliminate their tax liability.
  • Rebate – Direct payment issued to the production company by the state.
  • Grant – Direct payment issued to the production company by the state. Unlike rebates, you do not have to pay any tax on a grant.
  • Bonuses – Some states offer additional perks to filmmakers. Such as for using specific locations, local business, or hiring local staff.

Film Incentives – State by State

Below is a list of all of the states that added to, or tweaked, their incentives in 2021. All listed run at least until the end of 2022.

Arkansas

Incentive TypeRebate
WebsiteArkansas Production
Minimum Spend$200,000
Funding Cap$4,000,000

The Arkansas Economic Development Commission (AEDC) will hold a public hearing on proposed revised administrative rules for the Digital Product and Motion Picture Industry Development Act to conform the rule to revisions in Act 797 of 2021.

Act 797 of 2021 changed the rebate program to allow the incentive to be taken as either a rebate or a transferable tax credit. The Act also added an additional 10% incentive for qualifying veterans, extended the program’s sunset date through June 30, 2032, and set a cap on the tax credit of $4M per year.

California

Incentive TypeNon Transferable Refundable Tax Credit
WebsiteFilm California
Minimum Spend$1,000,000
Funding Cap$222,500,000

California’s Basics 3.0 tax incentive program hasn’t undergone any major changes, but it did get some major funding. In July 2021, a legislative bill added $180 million to the program – $90 million for the 2021-2022 fiscal year and $90 million for the following year. This bill also allocated $150 million to be used for renovating existing and building new California stages. The cap remains 20-25% for all crew, depending on the budget.

In addition, the criteria to qualify as a relocating TV series has been relaxed to include series that filmed their pilot episode out-of-state. The tax credit program previously required relocating series to film an entire season out-of-state.

Colorado

Incentive TypeTax Rebate
WebsiteColorado Office of TV and Film
Minimum Spend$100,000
Funding Cap$6,000,000

Before the pandemic, the Colorado legislature was granting as little as $750,000 a year to the state’s film incentive fund. After lagging behind for so long when it comes to providing film incentives, the Colorado legislature allocated $6 million to replenish the film incentive fund. The rebate applies to a variety of projects, including films, television, commercials, and video games. Although $6 million is a record amount for Colorado, the state still lags behind most of its neighbors.

Georgia

Incentive TypeTransferable Refundable Tax Credit
WebsiteGeorgia USA
Minimum Spend$500,000
Funding CapNone

Georgia’s tax credits continue to be some of the best in the nation. The Georgia Film Office reported that more than 360 productions were filmed in the state in 2021. That’s close to the number of productions filmed in Georgia before the pandemic.

All projects get a 20 percent spend. However, they are awarded an additional 10 percent if they include the made-in Georgia logo in the film’s opening and links to the Georgia website on the project’s landing page.

Kentucky

Incentive TypeNon-Transferable Refundable Tax Credit
WebsiteKentucky Film
Minimum Spend$250,000
Funding Cap$75,000,000

The state of Kentucky has new guidelines for its film incentives program, returning it to refundable credits that were scaled back in 2018. Although the funding cap was reduced from $100 million to $75 million, the state is now offering a refundable 30-35 percent tax credit. With the new guidebook, individual projects are capped at $10 million in a calendar year, and a production company can qualify for incentives on a maximum of four projects a year.

Louisiana

Incentive TypeNon-Transferable, Partly Refundable Tax Credit
WebsiteLouisiana Entertainment
Minimum Spend$300,000
Funding Cap$150,000,000

Attempts to both scale back and extend the life of the tax credit in 2021 failed in the state legislature, leaving the status quo in place. Louisiana continues to offer productions with up to a 40 percent tax credit on eligible expenditures. These include resident and non-resident labor.

Maryland

Incentive TypeNon-Transferable Refundable Tax Credit
WebsiteMaryland Film
Minimum Spend$250,000
Funding Cap$8,000,000

Since inception of the Film Production Activity Tax Credit program in 2011, Maryland has incentivized 13 major productions that employed thousands of residents, utilized thousands of local small businesses, and generated an economic impact of nearly $900 million in the state.

Massachusetts

Incentive TypeTransferable, Partly Refundable Tax Credit
WebsiteMA Film
Minimum Spend$50,000
Funding CapNone

Massachusetts provides a 25 percent payroll credit for eligible projects. The Massachusetts Film Production Incentive was updated this year stating that a company’s production expenses in the state, exceed 75% of all production expenses, or at least 75% of total principal photography days occur.

Minnesota

Incentive TypeRebate
WebsiteMN Film TV
Minimum Spend$100,000
Funding CapNone

For the first time, Minnesota offers a transferable tax credit for film and TV production. You can read the language of the bill here. The rebate reimburses up to 25% of eligible Minnesota production expenditures. The incentive is available to qualified feature films, documentaries, TV pilots, programs or series, TV commercials, music videos, internet and post production only. Rebates are scheduled to begin after January 1, 2022.

Montana

Incentive TypeTransferable Non-Refundable Tax Credit
WebsiteMontana Film
Minimum Spend$350,000
Funding Cap$12,000,000

The power of film incentives was on display for every producer to see when “Yellowstone,” the hugely successful Paramount Network series starring Kevin Costner, stopped filming in Utah last year and moved to Montana due to better incentives. The state Legislature raised its cap on incentives to $12 million during the 2021 session, higher than Utah’s $8.3 package. To qualify, 50% of all principal photography must take place in the state.

Nebraska

Incentive TypeGrant
WebsiteNebraska Film Office
Minimum Spend$1,000,000
Funding Cap$400,000

The state of Nebraska has dipped their toe into the water on film incentives. Starting back in October of 2021, the program sets aside $1 million for incentives for feature films that are shot on location in Nebraska and tell a Nebraska story. Projects must use Nebraska workers, and spend at least $1 million filming in the state, to qualify for grants of up to $400,000. The Nebraska law is the first major effort by the state to attract filmmaking there.

New Jersey

Incentive TypeTransferable Non-Refundable Tax Credit
WebsiteNJ Motion Picture
Minimum Spend$1,000,000
Funding Cap$100,000,000

Under the film tax break program, the state compensates producers for filming scenes in New Jersey and buying in-state goods. Murphy signed one expansion in January 2020, and another as part of the $14.5 billion economic subsidy program he approved earlier this year. State officials have used the program to attract such productions like “Joker” and “West Side Story.”

The yearly program cap on digital media productions increase from $10 million to $30 million, while the tax breaks for those kinds of productions increase to 35 percent of the expenses incurred in South Jersey in an effort to draw productions beyond the New York City area, and 30 percent in the rest of the state.

New Mexico

Incentive TypeTransferable Non-Refundable Tax Credit
WebsiteNew Mexico Film Office
Minimum SpendNone
Funding CapNone

As one of the first states in the U.S. to offer production tax incentives, New Mexico offers a refundable tax credit of 25% for spending on state film crews, goods, services and other eligible expenses. The rate can be as high as 35%, depending on where it’s filmed, among other factors.

The 25% tax incentive is also applicable to nonresident talent, given certain criteria are met. Best of all, New Mexico does not have a minimum spend, which makes it even more attractive to independent productions. Credits toward film productions were estimated at $109 million for the year ending in June 2021, and $52 million the prior year.

New York

Incentive TypeNon Transferable Refundable Tax Credit
WebsiteEmpire State Development
Minimum Spend$250,000
Funding Cap$420,000,000

Production companies may be eligible to receive a fully refundable credit of 25 percent of qualified production costs and post-production costs incurred in the state. There is a maximum of $5 million per year that can be allocated for the additional 10 percent credit on qualified labor expenses. The New York Commercial production incentive allows for online commercials to qualify as well, a boon for branded content companies.

North Carolina

Incentive TypeRebate
WebsiteFilm NC
Minimum Spend$1,000,000
Funding Cap$31,000,000

North Carolina has a strong history with the entertainment industry with incentive programs dating back to 2014. However, the program is evolving as the 2022 state budget adjusts the financial qualifications TV and film projects must meet in order to receive financial incentives from the state.

North Carolina has reduced minimum spend requirements for tv and movie projects and increased their spending caps with close to $30 million available in funding. The 25 percent rebate is available for “qualifying expenses and purchases made by productions while in-state.”

Oklahoma

Incentive TypeRebate
WebsiteOK Film
Minimum Spend$25,000
Funding Cap$30,000,000

In July of 2021, the state launched a new film incentive program that’s nearly quadruple the size of its current program. It’s part of a vision by lawmakers to turn the Sooner State into a production powerhouse. The program offers film and TV productions up to a 38 percent rebate on money they spend in Oklahoma.

Oklahoma’s base cash rebate is 20 percent and productions can increase the amount with boosts meant to spur long-term investment in the state. For example, there’s a two percent bonus for TV pilots and a five percent bonus for a full TV series season. There’s also a five percent boost for production companies that commit to making three films in three years. There’s an additional boost as well for filming in rural Oklahoma or a soundstage as well as doing post production work in the state.

Oregon

Incentive TypeRebate
WebsiteOregon Film
Minimum Spend$1,000,000
Funding Cap$20,000,000

Oregon has become increasingly well-known over the last few years, thanks in some part to the rebate program in the state. They offer qualifying film or television productions a 20 percent cash rebate on production-related goods and services paid to Oregon vendors and a 10 percent cash rebate on wages paid for work done in the state. An additional 10 percent is awarded if the shooting occurs outside of the Portland Metro Zone.

Tennessee

Incentive TypeGrant
WebsiteTennessee Entertainment
Minimum Spend$200,000
Funding Cap$13,000,000

Legislators in Tennessee approved a new incentive program in April of 2021, creating new sales-tax exemptions for “qualified productions.” The program is not first come, first served and grant awards are based on the discretion of Tennessee Entertainment Commission. As an interesting side note, companies must post a notice in local newspapers where the filming took place after principal photography, telling the public of the need to file creditor claims.

Utah

Incentive TypeTax Credit and Rebate
WebsiteFilm Utah
Minimum Spend$500,000
Funding Cap$8,300,000

A cash rebate can be given to projects with less than $500,000, where at least 85% of cast and crew are Utah residents. Currently, Utah has a capped incentive of $6.79 million and can be combined with a $1.5 million cash rebate. A bill in the state legislature is attempting to raise the annual incentive cap to $15 million, in order to remain competitive with surrounding states. It is currently in committee.

Wrap Up

Although film incentives can be intimidating at first, the benefits are obvious. You can save a lot of money on your production by applying for one. The cost of production is always an issue and producers need to keep them in mind while budgeting. States want you to choose their location over others, so don’t be afraid to send them over any questions. If you need help with your application, reach out to the individual state film commissions where you’re interested in shooting.

Production Incentives Update: Where We’re Going in 2020

Whether they are a financial godsend or a revenue burden to states, all agree that film and television production is booming due to film incentives and tax credits. The challenge for any producer is to stay up to date as incentives are in a constant state of flux… or disappear entirely. Here’s the latest on some of the notable state film and television incentives.

California: 3.0, Here We Come

California is about to have a slew of new changes to its production incentive offerings, with the Film & TV Tax Credit Program 2.0 ending in June 2020 and Program 3.0 launching in July. The Golden State will get $330 million to go into their incentives pot. Finally, independent projects with budgets under $10 million will have their own basket of credits to pull from. This is a major development, as the current program has large and small independents competing for the same film incentive funds, sometimes to the detriment of the smaller ones.

California will also roll out a new career-based training program as well as having a new requirements showing efforts to hire more women and minorities on productions. Production must also sign a pledge condemning any sexual harassment on the job.

The state will additionally have a brand-new incentives bonus for areas outside Los Angeles. This has become a trend happening in more and more states. It helps spread production through a state and create good faith for legislators whose districts lie outside a production area. Look for The Golden State to see an increase in independent production next year, due to these filming incentives enhancements.

Georgia: Winds of Change

Georgia’s generous tax credits have sparked a billion-dollar production boom but there are signs that might change. State Republicans are looking at reducing film production credits — the largest pot of tax incentives offered by the state — as a way of avoiding some of the serious cuts to a $27 billion state budget ordered by Governor Brian Kemp.

While Georgia’s incentive program is not the richest in the land, their tax credit system has no cap and is easy to apply for. All you have to do is slap on the peach logo! If that were to change, Georgia’s status as a film hub would be in doubt. Keep an eye on the upcoming legislative fight over incentives.

Illinois: On ‘Chicago Fire’

In an effort to attract more film industry jobs and spending, Governor J.B. Pritzker signed legislation last year extending film tax credits through 2026. The incentives, which give companies 30% tax credits on production costs and salaries, were set to expire in 2021. It’s good news for a state that needs good news after so much bad publicity. Studios look at every dollar spent and as Dick Wolf, creator of Chicago Fire, Chicago P.D. and Chicago Med had told the governor earlier this year that “if the tax credit goes, we have to go.”

Louisiana: Blue Bayou

Louisiana continues to be a tempting destination for film and TV producers and the state’s 25% – 40% tax credit, which is partially refundable, usually seals the deal. However, much like Georgia incentives are getting a push back in certain circles. A study last year shows that taxpayers are losing roughly two-thirds of the money they put into the state’s film tax credit program. With repeated budget shortfalls and cut spending in areas like health care and education, the Louisiana legislature could turn its attention to “Hollywood on the Bayou” for answers.

New York: Start Spreading the News

New York recently had some welcome news for branded content specialists as in 2020, they will allow for online commercials to qualify for the New York Commercial production incentive. This forward-thinking expansion will broaden the New York incentive outside the traditional broadcast commercials they currently cover. New York also made a slight change for tax credit programs which affects the overall credit allocation. Any New York credits dispersed in 2020 will have a .025% reduction applied to them that will in turn cover diversity job training in the state.

Montana: Incentives Are Back in Big Sky Country

Montana’s production incentive came roaring back earlier this year. The state resurrected a transferable film tax credit that provides a tax credit for 20% of production costs for projects shot in Montana. A trifecta of bonuses can bring that film credit up to 30% and even higher. They have a low minimum spend of only $50,000 and $5 million in the incentives tank, ready to go for productions in the area.

Mississippi: Re-Incentivizes Non-Resident Labor for Productions

Mississippi had become one of the forgotten states for production in the last two years since their production incentives program stopped qualifying non-residents working in the state. However, in April of 2019, they brought that element of the incentive program back, allowing non-resident payroll to be considered as part of base investment and eligible for a 25% rebate. Expect production to increase in the state as a result.

New Mexico: BACK ON TOP with Latest Incentives

As one of the first states in the U.S. to offer production tax incentives, New Mexico continues to lead by example. As it stands now, New Mexico offers 25% in a refundable credit on any qualified-spend items purchased through New Mexico vendors, as well as any New Mexico resident wages.

The 25% tax incentive is also applicable to nonresident talent, given certain criteria are met. Best of all, New Mexico does not have a minimum spend, which makes it even more attractive to independent productions. The funding cap also doubled, from $55 million to $110 million.

The new version of the tax incentive retains the 5% TV bonus. So as long as a show has at least six episodes and spends $50,000 per episode in the state, producers can realize a combined return of 30% in refundable tax credits. Veteran shows like Better Call Saul and Longmire continue to take advantage of this offering. Pilots may be able to capitalize on the TV bonus incentive as well.

OTHER STATE Film Incentives Get Fund Increases

Pennsylvania received $5 million increase to their already impressive $65 million funding pool. Hawaii managed a massive 43% increase to their $35 million cap, ending at $50 million and with hopes for more next year. Rhode Island also received a $5 million bump to their $15 million pot. Illinois has extended their program to 2026, Arkansas extends theirs to 2029, and Ohio continues to fund its program.

Colorado’s production incentive recently received a much-needed boost to its film funding program, adding $1.25 million to the pot. They now have a $2 million dollar funding cap on a solid rebate program. Applicants can still get 20% on all labor and spending incurred in the state. They hope the bump will bring some new shows to the area and give rise to an even larger increase in funding next year.

Making Their Way Back

North Carolina and Florida are working hard currently to bring work back to their filming communities with help from their production incentives. We look forward to tracking their progress in 2020 and beyond.