U.S. Tax Incentives: An AMA With Ryan Broussard

Twas the season for a robust recap of the hottest incentive trends in the United States, so Ryan Broussard, Vice President of Sales and Production Incentives at Media Services / Cast & Crew, sat down to answer anything and everything his audience wanted to know about the current state of domestic offerings. During the one-hour AMA, Ryan covered a breadth of topics, touching on everything from state-specific programs to overall incentive theory, all while baking a batch of his famous sugar cookies. The chat delved into some of the many ways producers can use national programs to their project’s advantage. 

Here are a handful of highlights from the hour-long session, sampling the broad spectrum of topics covered during the chat.  

With so many different financial incentives out there, it’s important to know what kind of program each state or locale is offering and the benefits and responsibilities that come with each. As Ryan tells it, there are three main types of credits available to filmmakers depending on location.  

First, you have grants and rebates. These two options denote cold, hard cash in hand. Film offices already have it, so there’s no need to file a tax return or deal with high wait times for reimbursement. Obtaining a grant or rebate requires that productions hit certain locale-specific criteria. This is the fastest (and easiest) cash a production will find, with no requisite return, selling of a credit, or partially refundable exchange with the state. If your production fulfills certain requirements (and a grant or rebate is available), the money is yours. Importantly, most local invectives are grants and rebates. 

Next up: tax credits. These are refundable options that can be obtained through the state by meeting their unique program’s specific criteria and then filing a tax return. Generally, the state gives the calculated difference in the form of a check, though some states (like Louisiana) offer partially refundable credits instead of a full credit. These credits must be applied for through the tax process. They require a return, which successively requires that productions set up something like a corporation in a specific way (which can depend on the state). To get the credit, productions must follow tax laws, which can be a bit more cumbersome and take much longer than grants and rebates. 

Finally, there are transferable credits. These have more of a fluctuating nature. Even after obtaining a credit by completing the state’s requirements, your production will not be refunded directly (as with a refundable credit). So, this subsidy must then be taken to the open market where it can be purchased by someone with existing liability in the state who wants to offset that liability by buying your credit. For example, if you try to sell a transferable credit in Georgia, you might find a buyer in a company like Coca-Cola, who owes a great deal of taxes to the state. Companies like these will buy the credit at “less-than on the dollar,” so this is a calculation that must be budgeted. It’s a win-win situation; they save money, and your credit is turned to cash.  

Ryan is quite excited about Arizona’s new incentives program, which has big money to offer and even loftier ambitions. This new refundable credit program, which has already been passed into law and begins funding in January of 2023, is a tiered system that has the potential to advantage independent productions a great deal. The program will offer more for your money based on your in-state spending. While there’s not a ton of information or experience yet with the new program, the numbers show enormous potential. For example, projects that spend under $10 million could receive 15% on spend and nonresidents and 17.5% on residents working in the state. Those projects who spend $10-35 million might see 17.5% on spend and nonresidents and 20% on residents. Bigger projects that spend more than $35 million (like big studio projects) could see 22.5% on residents and 20% on spend and non-residents. With numbers like these, Arizona is bound to get busy. The program even offers bonuses with its refundable credit. And it’s very well-funded, with $75 million available off the bat in 2023. Currently, the program is allocated through 2023, and Ryan estimates the pot could grow to upwards of $125 million. It also incentivizes nonresident producers and directors, unlike nearby programs in New Mexico and California. However, the payroll fringes can be a bit high here, so that is something to consider. Overall, Ryan is extremely excited to see where it goes.  

This is a region with a number of opportunities. In Oregon, a rebate program is available that provides a quick turnaround. In fact, the exciting program recently nearly doubled what it gives back, upping the ante from 10 to 20% for labor incurred in state. Spending has increased to a generous 25% back on their rebate as well. There are also some programs available to filmmakers that can be bundled together with the base Oregon Production Investment Fund (OPIF), such as the Greenlight Oregon Labor Rebate (GOLR), which allows for an additional 6.2% rebate on your labor. Or you can receive an additional bump in your rebate for filming in regional areas of the state. What’s more, the state has many specified programs (such as the one for indigenous people), which provide help for groups and communities of filmmakers. Also in the region, Washington state recently revamped their existing program, which has a reputation for being a bit meticulous as to who receives funds. Now, the program has eased their existing resident requirement a bit. The state maintains a rule whereby they only incentivize a production that is providing paid benefits to its crew. So, if you’re planning on heading to Washington to shoot a non-union project, you are not likely to qualify for relief. The state wants to be sure its funds are being paid directly to employees or through a union.  

Credits don’t grow on trees. Therefore, they must be aggressively pursued if a production wants to take full advantage of their benefits. Producers must constantly “watchdog” the entire credit process, from application to completion. So, if you’re a producer or financier worried about liability, you absolutely must talk to the state film office, but more importantly, state and third-party auditors. This doesn’t just mean your production’s personal CPA (which is a given, as you’ll most likely need to set up a corporation or LLC, depending on the state); you must also open a line of frequent communication with the state’s auditor, whether that is an in-house auditor or one from a list of locale-approved firms. Reach out to them in advance and let them know you’re coming to film a project. Ask them if you’re doing everything correctly and rely on their experience and insights to ensure that you receive the credit your project is relying on. Connecticut's program, for example, has extremely specific requirements for setting up a company to maximize a return. Talking to an auditor who knows local rules will certainly help the process. In terms of liability, you want to make sure you’re doing everything correctly. Every state is different. Do your homework and talk to people who know the lay of the land. 

In most circumstances, it can be tricky to claim refunds and credits from two different states when shooting a few days in one or both locations. However, there are opportunities for producers to be a bit more creative by taking advantage of local programs and larger state programs at the same time. On occasion, these incentives can be stacked, allowing productions to receive state and local programs (specifically with areas that have local authority). Louisiana, for example, contains Jefferson Parish, whose offerings are separate from the state’s. Similarly, Georgia contains Savannah, an area that offers an extra 10% on local labor and spending on top of what the state provides. In these specific instances, it’s possible to earn an extra percentage back by utilizing both offerings. Even more impressive, Minnesota provides an opportunity to triple-stack your incentives, such as combining the state program with those of the Iron Range and St. Louis County, or even their Austin area. These local incentives can be triple stacked to offer expanded returns. If you’ve budgeted and planned correctly, you can even go after different incentives on the same production if you’re shooting in the right areas. 

Don’t leave money on the table. States want your production dollars, so find a way to take advantage of the programs that suit your project. But in doing so, be sure to keep a vigilant eye on the overall process, from start to finish. Timing is key. It would be hard to find out that the state funds you were planning to use for postproduction are unavailable because you missed a filing deadline or application submission. There are plenty of opportunities to save money and reinvest into your production—wherever it’s shooting—so long as you are diligent in pursuing these opportunities. If you need cash next month, will the incentive get back to you in time? Some can take months or years to reach a production’s coffers. So, as Ryan said while munching on one of his almost-charred confections: “Don’t burn your cookies.” 

We’re here to save your production money 

Want to watch the entire chat? You can find the full recording here. And as always, find up-to-the-minute incentives information—including the Media Services interactive map and Incentives Wizard calculator—at www.mediaservices.com/incentives. 

Do you have specific questions you’d like answered? Feel free to reach out to Ryan directly at RyanB@mediaservices.com. He’s ready and eager to answer all your incentive-related queries, big or small.