States with Tax Credits, Rebates, & Grants
Investment Objective & Strategies
IRS SECTION 181
The American Jobs Creation Act Of 2004 and the 2004 enactment of Section 181, marked an unprecedented change in U.S. policy toward the phenomenon known as “Runaway Production” for the film industry. Hollywood, like many American industries, had grown tired of the high cost of labor and taxes in the United States. Canada and other countries identified the potential financial benefit and took advantage by successfully luring American film and television production onto their soil, taking enormous amounts of production dollars with them. The government’s reaction was to include Section 181 within the American Jobs Creation Act of 2004. Section 181 offers tax incentives for investors in independent film and television productions produced within the United States.
Here are some Investor broad strokes for the Section 181 Tax Deduction:
- 100% of the motion picture costs are deductible in the same year the production is released to the public.
- 75% of the motion picture must be shot in the US to qualify for Section 181.
- There is no longer an investment budget cap.
- There is no minimum film/TV production budget cost.
- TV pilots, TV episodes (up to 44), short films, music videos and feature films all qualify for Section 181.
- Section 181 can be applied to active income or passive income.
- Investors can be either individuals or businesses.
- The motion picture’s corporation issues Schedule K-1’s to the investors so they can take advantage of Section 181.
State incentives, typically tax credits or rebates) are offered on a state-by-state basis throughout the United States to encourage in-state film production. These incentives came about in the 1990s in response to the flight of movie productions to other countries such as Canada. Since then, states have offered increasingly competitive incentives to lure productions away from other states. The structure, type, and size of the incentives vary from state to state. Many include tax credits and exemptions, and other incentive packages include cash grants, fee-free locations, or other perks.
Unifi Film Funding Company – March 14, 2019
“…Georgia ranks in the top three states for film and television production, behind New York and California. According to a economic impact report, filming contributed $7 billion to the local economy in 2016. …. lawmakers in Georgia are doubling down on these programs in an effort to build out the production industry …”
CLICK MAP FOR INTERACTIVE TAX BENEFITS BY STATE
For example, Louisiana which has a state tax credit up to forty percent (40%) including resident and non- resident labor. Most states with incentives monetize the credits BEFORE production for up to 90% of the credit amount. Continuing this example, if a film is shot in Louisiana with budget of $1,000,000, the state would provide the production entity up to 40% of the entire budget in transferrable state tax credits. If the investor was not a resident of Louisiana, the state would monetize 90% of the credit to the production company before filming commenced. That would provide the investors a return of $360,000 ($1,000,000 x .40 x .90) before filming even began.
Why invest with 881 Productions?
- We are an investor friendly film company meaning that our films are set up to make money for our investors. We have developed teams in the industry that are cost savvy and new technologies have enabled us to produce the highest quality films at an affordable price.
- We screen and modify every script to ensure they are marketable.
- We have direct contact with industry leaders.
- We have clear morals and are honest and upfront in our business dealings.
OTHER INVESTOR BENEFITS:
As an Investor you can participate in the production:
- Come to the set
- Play a cameo role, if wanted
- Receiving an Executive Producer Credit
- Receive mugs, T-shirts, and other promotional merchandise that are made for the film production
- The chance to hook up with some stars
Attend Premieres and Festivals:
- You and your family and friends may attend Red Carpet VIP Events at Premieres
- Come to the film festivals you want to attend
- Personal mentions in select press, if the investor would like to be mentioned
- Attend press conference
Click state below for tax credits and other benefits by state: