Top International Incentives: The Regions Making the Cut

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Parent Category: News

Published on Wednesday, 31 October 2012 14:35

Written by Dyana Carmella

Despite the world’s current economy woes, a wide variety of films, commercials and television projects are on the hunt for the best incentives offered by regions around the globe. These incoming productions can lead to increased economic activity, job creation and a major boost in tourism, and smaller business infrastructures benefit greatly when a film or TV production rolls through town.

With constant updates in legislation, international regions are in a race to offer the most appealing financial perks to encourage production shoots. These incentives may in the form of tax credits, exceptions and other financial perks, such as cash grants and fee-free locations. Entertainment Partners is a leading provider of production services, such as payroll, software, residual administration/processing, extras casting, and incentive services (including consulting, production administration and production tax-credit placement). The company can also supply an international list of jurisdictions offering competitive incentive programs along with details on local laws, processes and funding. “Currently there are approximately 40 U.S. jurisdictions and 30 international territories offering production incentives to film and television producers,” says Joseph Chianese, executive VP of financial solutions at Entertainment Partners. “Note [that] I say ‘approximately’ because the legislation continues to change in the U.S. and around the world, with the U.S. and international territories continuing to offer new incentives or modifying existing incentive programs.”

P3 takes a look at the diverse palette of incentive packages currently luring film and TV projects to shoot on location, including great locales, skilled crews and infrastructures that can meet the high demands of the industry.

CANADA

Canada has been offering production credits longer than any other jurisdiction. The lack of a federal production incentive in the United States has put Canada at a great advantage, and Canada’s competitive industry funding and incentive programs assure that it will remain a solid and highly utilized jurisdiction. The country currently offers federal and provincial refundable tax credits, including postproduction, animation and video-effect credits (specifically in British Columbia, Ontario and Quebec). These credits range from 16 percent of Canadian labor and production spend to as much as 60 percent (with bundling).

In British Columbia, the basic Production Services Tax Credit (PSTC) is 33 percent of qualified B.C. labor expenditures, while the regional tax credit is 6 percent (pro-rated by the number of days of principal photography in B.C. outside of the designated Vancouver area to the total days of principal photography in B.C.). Quebec offers 25 percent cash back on all production expenses, which includes qualified labor, per diem, fringes, equipment/rentals, stages, film location fees, lodging, flights, meals, entertainment and insurance. (Wages or salaries for a non-resident producer, director, author, scriptwriter, production designer, cinematographer, music director, composer, conductor, editor, VFX supervisor, actor or interpreter do not qualify for this tax credit.) The only requirement is a minimum total budget of CAD$1 million for a feature film, CAD$100,000 for a TV series episode or pilot of 30 minutes or less, and CAD$200,000 for a TV series episode or pilot over 30 minutes.

LOUISIANA

With an array of disparate locations, strong infrastructure and a very large, highly skilled crew base, Louisiana has made a big name for itself in the entertainment community. The state has recently hosted many highly touted productions, including Butter (starring Jennifer Garner), The Twilight Saga: Breaking Dawn, Beasts of the Southern Wild and the HBO series “Treme.” Louisiana has a mature and reliable credit program place, offering a 30-percent tax credit on eligible in state expenditures on goods and services plus an additional 5 percent on Louisiana labor. The state also guarantees 85 percent on the tax credits if transferred back to the state. Also, tax credits may be sold back to the state for 85 percent of face value. 

NEW YORK  

It seems that New York’s current incentives are too hard to pass up. The state is making a strong statement with an impressive list of recent productions, like Joel and Ethan Coen’s Inside Llewyn Davis (starring Oscar Isaac, Justin Timberlake and Carey Mulligan), The Place Beyond the Pines (starring Ryan Gosling, Bradley Cooper and Eva Mendes) and Can a Song Save Your Life? (starring Mark Ruffalo and Keira Knightley), The Angriest Man in Brooklyn (starring Robin Williams and Mila Kunis), Noah (starring Russell Crowe, Emma Watson and Jennifer Connolly), Very Good Girls (starring Dakota Fanning and Elizabeth Olsen) and Steven Soderbergh’s The Bitter Pill (starring Rooney Mara, Jude Law and Channing Tatum).

These big-budget film projects and many major television series have cited New York’s tax credit program as a leading factor in the decision to shoot in various areas of the Empire State. New York currently offers tax credits to television and film productions that choose to shoot or do postproduction in the state. The New York State Film Production Credit is a fully refundable 30-percent tax credit on qualified costs incurred by productions in the state. In addition, New York recently increased its postproduction credit from 30 percent to 35 percent, which is creating even more buzz in the industry.

GEORGIA

Georgia’s film, television and digital entertainment tax credits of up to 30 percent have created significant cost savings for companies that produce feature films, television series, music videos, commercials, interactive games and animation. The state’s Entertainment Industry Investment Act provides a 20-percent tax credit for companies that spend $500,000 or more on production and postproduction in Georgia (for a single production or multiple projects). And Georgia will grant an additional 10-percent tax credit if the finished project includes a promotional logo provided by the state. If a company has little or no Georgia tax liability, it can transfer or sell its tax credits.

“Georgia is attracting productions in record numbers,” reports Lee Thomas, the director of the Georgia Film, Music & Digital Entertainment Office. “Our competitive incentives, talented crew, diverse locations and accessibility [via Atlanta’s Hartsfield-Jackson International Airport] give us an edge when productions are picking a location to shoot a film or TV series. More than 327 productions have shot in Georgia during fiscal year 2011, generating an economic impact of $2.4 billion.” Current productions shooting in Georgia include The Hunger Games: Catching Fire, The Internship (starring Will Ferrell) and Scary Movie 5.

NORTH CAROLINA

North Carolina has been welcoming an impressive lineup of big production hits, including You Are Here (written/directed by “Mad Men” Creator Matthew Weiner), We’re the Millers (starring Jennifer Aniston), The Hunger Games, Iron Man 3, Showtime’s Emmy-winning “Homeland” and NBC’s “Revolution.” With a 25-percent fully refundable tax credit and no annualized cap, the state is becoming a number-one location for film and TV projects. Other state perks include North Carolina EUE Screen Gems, which resides in Wilmington and offers a total of 150,000 square feet of studio stage space on a 50-acre film and TV production complex with ten soundstages, two special-effects water tanks and 30,000 square feet of office space.

MASSACHUSETTS

Massachusetts has locations suited for all kinds of productions, such as thatched roofs built in the1600s, futuristic glass-and-steel structures, seaside and mountainside vistas, urban tenements and stately manors. The high-profile projects that recently shot in the state include R.I.P.D. (starring Ryan Reynolds, Kevin Bacon and Jeff Bridges), Grown Ups 2 (starring Adam Sandler, Chris Rock, Kevin James, Selma Hayek and David Spade), The Way, Way Back (starring Steve Carell, Toni Collette and Allison Janney), Labor Day (starring Kate Winslet, Tobey Maguire and Josh Brolin), The Heat (starring Sandra Bullock and Melissa McCarthy) and HBO Films’ Clear History (starring Kate Hudson, Jon Hamm, Michael Keaton and Eva Mendes).

Massachusetts currently provides filmmakers with a package of tax incentives, including a 25-percent production credit, 25-percent payroll credit and a sales-tax exemption. (Any project that spends more than $50,000 in Massachusetts qualifies for the payroll credit and sales-tax exemption.) Eligible projects for the production credit must spend more than 50 percent of its total budget or film at least 50 percent of principal photography days in Massachusetts. The payroll credit includes above- and below-the-line crew, while the production credit includes out-of-state purchases and equipment rentals. There are no annual or project caps, no residency requirements or no extended schedule of credit payouts.

CALIFORNIA

Over the past year, California has been the home of the industry’s most sought-after productions, including Paul Thomas Anderson’s The Master (starring Philip Seymour Hoffman and Joaquin Phoenix), Gangster Squad (starring Sean Penn, Ryan Gosling and Emma Stone), Argo (starring and directed by Ben Affleck), End of Watch (starring Jake Gyllenhaal and Michael Peña), This Is 40 (directed by Judd Apatow), Savages and the TV series “CSI: N.Y.,” “Rizzoli & Isles,” “Body of Proof,” “Justified” and “Parenthood.” More productions are sure to stay in California, thanks to the state’s Film & Television Tax Credit Program which provides credits against income and/or sales-and-use taxes on qualified expenditures. The original five-year, $500 million program was enacted in 2009 and recently extended for an additional year (through fiscal year 2014–15), and pending legislation can extend the program another two years. The current program offers $100 million a year in tax credits to eligible projects.

California’s tax credits range from 20 percent to 25 percent, depending on the type of production. The projects eligible for a 20-percent tax credit include feature films with budgets from $1 million to $75 million, TV movies or miniseries with a $500,000 minimum budget, and any new TV series with a $1 million minimum budget licensed for original distribution on basic cable. Projects eligible for a 25-percent credit include TV series that relocate production to California (after shooting all prior seasons outside of the state) and independent films with “qualified spend” budgets of up to $10 million.

FLORIDA

The sunny state of Florida has welcomed the film productions of Pain and Gain (starring Mark Wahlberg, Dwayne Johnson and Anthony Mackie), Spring Breakers (starring James Franco and Selena Gomez), Magic Mike and Rock of Ages as well as the TV series “Magic City” and “Graceland.” The state’s incentive program consists of a 20- to 30-percent transferable tax credit with a 20-percent base percentage, 5-percent Off-Season Bonus (for certain production types) and 5-percent Family Friendly Bonus (for certain productions). Additional bonuses for the state’s General Production Queue include 5-percent Qualified Production Facility Bonus, 5-percent Qualified Digital Media Production Facility Bonus, and 5-percent Underutilized Region Bonus. Florida also offers a sales-tax exemption for expenditures and wages related to production in the state.

UNITED KINGDOM

Big-budget films continue to lens in the always popular United Kingdom, including the latest James Bond film Skyfall (starring Daniel Craig), The Counselor (directed by Ridley Scott and starring Brad Pitt, Michael Fassbender and Cameron Diaz), Maleficent (starring Angelina Jolie), Les Misérables (starring Hugh Jackman, Russell Crowe and Anne Hathaway), The Dark Knight Rises, Prometheus and Snow White and the Huntsman, just to name a few. “The U.K. film industry has proved itself to be vital to the economy, and that is something which should be celebrated, and of which we should be very proud,” says Adrian Wootton, chief executive of Film London and the British Film Commission. “As home to some of the world’s most sought-after filmmaking talent, first-class infrastructure and facilities, and the crucial competitive tax relief, the U.K. industry looks set to continue this success in the years ahead.”

The United Kingdom currently offers a 20- to 25-percent refundable tax credit. For films with a total core expenditure of £20 million or less, the film production company can claim a rebate of up to 25 percent of U.K.-qualifying film production expenditure. For films with a total core expenditure of more than £20 million, the production company can claim a rebate of up to 20 percent, and there’s no cap on the amount that can be claimed. The British government recently announced a tax-credit program for high-end television production. Effective on April 1, 2013, this inclusion of TV projects as qualified U.K. productions will strongly impact television production across the pond. 

GERMANY

Germany’s history and cultural diversity are stealing the limelight. The country currently offers film and TV productions a stunning selection of locations that include islands, seas, mountains, valleys, rivers, lakes, medieval ruins, castles and industrial centers. It also has a competitive, solid and reliable incentive program. Productions can receive a 20-percent rebate of qualifying local spend in addition to having the benefit of the country’s strong infrastructure and crew base. Plus, Germany offers a variety of regional incentives for shoots in places like Bavaria, Berlin and Hamburg, just to name a few. Recent productions shot in Germany include Hansel and Gretel: Witch Hunters (starring Jeremy Renner and Gemma Arterton), Brian DePalma’s Passion (starring Rachel McAdams and Noomi Rapace), Lars Von Trier’s Nymphomaniac (starring Shia LaBoeuf and Jamie Bell) and the much-anticipated sci-fi epic Cloud Atlas (starring Tom Hanks and Halle Berry).

These top international locations all deserve high praise for continually attracting the industry’s most sought-after entertainment projects. To learn more about the film and TV production incentives offered by these and other jurisdictions around the world, visit www.productionincentives.com.