Have you ever wondered why most of the renowned movies like the Ant-man and the Wasp, Baywatch, The Hunger Games, and X-Man: First Class, etc., all have their production footprint going back to the state of Georgia?
The reason is quite intriguing and tax-saving! Georgia is a production-friendly state and provides substantial tax credits of up to 30% for films produced there. Not only do the production companies receive such attractive tax credits, but they can also sell the unused ones to Georgia citizens and make a profit on the same.
Thus, if you are into the movie production business or are a Georgia citizen looking forward to smart tax breaks, then you need to know all about the Georgia Film Tax Incentive.
All about Film Tax Incentive
The state of Georgia celebrates and promotes the production of feature films, television movies or series, documentaries, commercials, music videos, etc. by providing a tax credit of 20% to qualified productions. You may also get an additional 10% of the tax credit by including “Filmed in Georgia” promotional logo in the end credits of the finished piece of work. So, a total of 30% of Film Tax Incentive is at your disposal if you plan to produce your work in the state of Georgia in the United States.
The minimum investment requirement to avail Georgia Film Tax Credits
The minimum investment required to avail the benefits of the Film tax credits in Georgia is $500,000. The minimum investment could be spent on one or multiple projects over a single tax year. Please note that such tax credits are only valid for qualified expenditures such as expenses made on materials, service, and labor only in the state of Georgia.
Find out if you qualify for the Georgia Film Tax Credit
Only production companies qualify for the Georgia Film Tax Credit. To qualify, you would need to record your preproduction, production and postproduction work in Georgia with the intent for multimarket commercial distribution outside Georgia.
All about qualified projects
Only the following type of projects qualify for the Georgia Film Tax Credit: –
1. Feature Films
2. Television Series, pilots, and movies
3. Television Commercials (For 20% Credit)
5. Music Videos
How to certify your production?
You need to get your production work certified by the Georgia Department of Economic Development to become eligible for the 20% Film Tax Credit. You can apply for this certification through the Georgia Film Office. You would need to apply for it within 90 days of the start of principal photography.
Please note, you would need to start your production work within 30 days of the date of the certification letter. If not, then you would need to submit an amendment in writing to the Georgia Department of Economic Development before starting with your production work anytime beyond 30 days.
How to apply for Film Tax Credit
To apply for 20% Film Tax Credit, you would need to: –
1. Complete 20% certification for all projects
2. Attach a final shooting script and an additional storyboard in case of commercials and music videos
For an extra 10% Georgia Entertainment Promotional (GEP) Uplift, you would need to follow an additional step along with the above two, which is as follows: –
3. Complete 10% GEP Uplift application
Note: Commercials are not eligible for 10% GEP Uplift Tax Credit.
How can you avail your Film Tax Credit?
After the process for application of Film Tax and GEP Uplift Credit is finished and approved, you would receive a certification letter from the Georgia Department of Economic Development. This certificate would need to be attached to your Georgia Income Tax Return to claim your tax credits.
Transferability of Film Tax Credit
You can use Georgia Film Tax Credit against Georgia Income Tax liabilities or use it for the company’s Georgia Withholding. You can also transfer or make a one-time sale of your unused Film Tax Credits to Georgia taxpayers at a cost lesser than the original price but not below 60% of the total credit amount.
This way, you can earn some profits on your unused tax credits, and Georgia taxpayers can get a tax break by saving the difference. Please note that the Film Tax Credit can only be carried forward for five years from the date the production company claims their first tax credit.
For Example: If the date of transfer of tax credits is 12th November 2017 and the production company claimed the tax credit on a year-end return on 31st December 2017, then five years would be calculated from 31st December 2017 onward, i.e., the date on which tax credit is claimed.
In conclusion, we may say that the state of Georgia can give you a good tax-saving production experience and increase your profit margins. Many of the renowned film producers make Georgia their production destination because of the availability of such financial tools and support. So, what are you waiting for? Contact the MyTaxFiler team and get a head start to save big on your taxes this year.
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