Film Tax Credits & Film Tax Incentives Explained

Overview of Film Tax Credits and Film Tax Incentives

Film tax credits and film tax incentives explained, description of types, how to monetize them, and benefits to local economies. Major Hollywood Studio Producer Jack Binder outlines film tax credit details.

Film tax credits and film tax incentives (also known as Production Incentives) are widely used film finance source for filmmakers, production companies, major studios, and independent films worldwide. Forming a portion of film financing for productions, the net benefit can range from 15% to up to 55% of eligible expenditure locally.

National and local government bodies have understood that providing film and television support for a television or film budget for media productions encourages inbound investment into local economies.

List of U.S. Film Tax Credits

Below is a list of U.S. film tax credits by State with the incentive percentage (rate), type (rebate or transferable), and details (potential uplifts, etc.), and annual cap permitted by legislation.

State Rate Type Details Annual Cap
Alabama 25% Rebate Additional 5% for local hires $20 million
Alaska No active program N/A Program suspended N/A
Arizona 15–20% Rebate Additional 2.5% for select counties $75 million
Arkansas 20% Rebate Additional 10% for resident cast/crew No cap
California 20–25% Rebate Additional 5% for filming outside major cities $330 million
Colorado 20% Rebate Requires 50% local workforce $45 million
Connecticut 30% Transferable Minimum spend requirement No cap
Delaware No active program N/A No film tax incentives N/A
Florida No active program N/A Program expired in 2016 N/A
Georgia 20% Transferable Additional 10% for using state logo No cap
Hawaii 20–25% Rebate Additional 5% for filming on neighbor islands $50 million
Idaho No active program N/A No film tax incentives N/A
Illinois 30% Transferable Additional 15% for disadvantaged areas No cap
Indiana 30–35% Rebate Increased rate for local production spending $25 million
Iowa 15% Rebate Encourages local production spending $10 million
Kansas No active program N/A No film tax incentives N/A
Kentucky 30% Transferable Incentive for rural productions $15 million
Louisiana 40% Transferable Bonus for resident hiring; widely used $300 million
Maine 20% Rebate Incentive for on-location filming $10 million
Maryland 25% Transferable Encourages digital effects & post-production $50 million
Massachusetts 25% Transferable Additional bonus for local hires $60 million
Michigan No active program N/A Previously suspended N/A
Minnesota 20% Rebate Incentive for regional productions $15 million
Mississippi 20% Rebate Bonus for local filming $20 million
Missouri 25% Rebate Incentive for production in rural areas $30 million
Montana No active program N/A No film tax incentives N/A
Nebraska No active program N/A No film tax incentives N/A
Nevada 20% Rebate Bonus for filming outside major casinos $25 million
New Hampshire No active program N/A No film tax incentives N/A
New Jersey 30% Transferable Incentive for on-location & studio filming $100 million
New Mexico 25–30% Transferable Multiple bonus incentives available $140 million
New York 30% Transferable Additional incentive for filming outside NYC $350 million
North Carolina No active program N/A Program expired N/A
North Dakota No active program N/A No film tax incentives N/A
Ohio No active program N/A Program suspended N/A
Oklahoma 30% Transferable Encourages local production spending $20 million
Oregon 20% Rebate Bonus for post-production work $30 million
Pennsylvania 25–30% Transferable Bonus for filming outside metro areas $150 million
Rhode Island No active program N/A Limited/no incentives N/A
South Carolina 25% Rebate Additional 5% for local hiring $20 million
South Dakota No active program N/A No film tax incentives N/A
Tennessee 30% Transferable Incentive for both rural & urban filming $35 million
Texas 20–25% Rebate Bonus for designated filming zones $150 million
Utah 25% Rebate Bonus for mountain region filming $25 million
Vermont No active program N/A No film tax incentives N/A
Virginia 20–25% Transferable Incentive for regional productions $50 million
Washington 20% Rebate Bonus for high-tech productions $30 million
West Virginia No active program N/A No film tax incentives N/A
Wisconsin 30% Transferable Bonus for hiring local talent $40 million
Wyoming No active program N/A No film tax incentives N/A

Film tax incentives programs change constantly. For the most precise and up-to-date information, it’s always best to check the official state film commission sites before making location decisions.

Contact FilmBudget.com Founder Producer Jack Binder for an analysis, calculation, and estimation of film tax credits finance amounts and which U.S. States may be most suitable for your production.

List of UK and Europe Film Tax Credits and Film Tax Incentives

UK and European film tax credits list with additional details. Rebate, refundable, transferable, grants for incentives listed with current rates. Western and Eastern Europe locations including the United Kingdom.

Country Rate Type Details
United Kingdom 34% (25.5% net) Tax Credit 80% of UK spend eligible. 39% VFX uplift starts 2025.
Germany 20–25% Grant Supports German-based spend and labor costs.
France 30% Tax Rebate Higher rates for animation, VFX, and international shoots.
Hungary 30% Tax Credit No cap. 25% of eligible spend may be non-local.
Czech Republic 20–35% Cash Rebate Rising to 35% for some costs from 2025.
Italy Up to 40% Tax Credit €18M project cap. Co-production or local spend needed.
Ireland 32% Cash Rebate On Irish spend. Cultural test applies.
Belgium Up to 45% Tax Shelter Investor-based system. Belgian partner required.
Poland 30% Cash Rebate Min. spend and cultural test required.
Lithuania 30% Tax Incentive Min. €43K spend. Open to foreign productions.
Slovakia 33% Cash Rebate Requires local services and minimum budget threshold.
Romania Up to 35% Cash Rebate Program reactivated for 2025. Subject to budget cap.
Croatia 25–30% Cash Rebate Bonus 5% for filming in underdeveloped areas.
Serbia 25–30% Cash Rebate Cultural test and rural uplift available.
Cyprus Up to 45% Cash Rebate Available for features, TV, and post/VFX work.

Always double-check with the country Film Commission for latests rates, rules, and changes.

Types of Film Tax Credits: Rebates, Refundable, Transferable

The three main types of film tax credits are refundable, rebate, and transferable

Refundable Film Tax Credits (Rebates)

Refundable and Rebate film tax credits are similar in that they both entail a cash outlay from the governing body to the production. A refundable incentive is an allowance toward taxes which may be owed by a production in the jurisdiction, for which the excess over what is owed is returned to the entity responsible for making the film or tv show. 

A Rebate Film Tax Credit is similar to a Refundable one, in that it is a cash outlay to the production. The governing entity literally writes a check to the production company responsible for the expenditures.

Transferable Film Tax Credits

A Transferable Film Tax Credit takes a different approach as it is a true credit which is transferred to an entity owing taxes as a way to reduce their own net outlay. This takes the form of a company with a large tax bill, which acquires tax credits at a discount, with the difference in the amount of the credit to what they paid for it as a savings to the company.

Transferable tax credits must be sold to a company via a film tax credit broker, who arranges and connects the buyer and the seller. The tax credit is reduced in this process by as much as 4%-11%, yielding a net to the production of 89%-96% of the film tax incentive net benefit. 

Contact Producer Jack Binder to discuss your production with a free consultation.

Consider the Type of Film Tax Credit, Percentage, Annual Cap

The above factors must be considered when analyzing locations and film tax credits, with the understanding on what the actual return will be. Most locations now require an audit by a third party, and a CPA can help with this and often arrange connection with a broker.

The Benefit to Film and TV Production and Local Economies

Offering film tax credits and production incentives has created a win-win situation for entertainment production and participating jurisdictions’ economic benefit. Large sums of money flow into the local economy, while film and television production finance shortfalls in funding are assisted by federal, state and local treasuries.

Film and television production is encouraged, supported, and welcomed with the establishment of film commissions dedicated to luring production to their area. Billions of dollars of inward investment and expenditure is deployed into the communities in which the incentives are utilized.

Federal, State, and Local Government subsidies in the form of tax credits help productions fill gaps in funding, ensuring a stable and reliable (more on this below) source of finance as a percentage of a project’s film or tv budget. The average film tax credits percentage is about 20-30% of a project budget.

Film Tax Credit and Film Tax Incentives Updates

New York Increases Film Tax Credits for Indie Film

New York has created a new program to invest $100 million for indie films. Additionally they have increased funding for big budget movies over $100m as well as those above $20m. The program takes affect in the new state budget effective April 1, 2025. Full details here.

Czech Republic Increases Refundable Tax Credit Amount and Per Project Cap

Czech Republic announced an increase in its refundable film tax credit program from 20-25% on December 11, 2024 effective January 1, 2025. Additionally the government tripled the per project cap to €18m from €6m. Documentaries with a minimum runtime of 70 minutes qualify and documentary series will be eligible for the 25% incentive in 2026. Read the article here.

Denmark Announces Film and Television Incentives Program

Denmark announced that it will allocate $17m to a new film tax credit and production incentives program for film and television. Country will join other Nordic states expanding their film and tv support offerings.

Hungary Updates and Extends Film Tax Credit Program to 2030

Hungary has extended its reliable film tax credit to 2030, adding additional certainty for film financing to rely upon. Budapest based film tax incentive stands at 30% for film and television series productions.

Recent filmed productions in Hungary include ‘Alien: Romulus’, ‘The Brutalist’, and ‘The Day of the Jackal’.

Australia Film Tax Credit Updated and Increased to 30% for Film and Television

Australia Location Offset increased to 30% for film and television international production filming in Australia. The Location Offset production rebate has been increased from the previous 16.5% level as of July 2024.

The Producers Offset for local Australian productions remains in effect complementing the location film tax incentives programs, with the government demonstrating strong support for the entertainment industry.

U.S. Film Tax Incentives and Co-Production Webinar

Here is a good film tax incentives and co-production webinar featuring industry professionals. How to apply for production incentives, dollars caps, co-productions are all explained and detailed in this informative episode.

State by State Updates to US Production Incentives Programs

Our friends and colleagues at GreenSlate have listed a state by state summary of production incentives programs updates.

For a list of global production incentives mapped with detailed information visit:

https://www.ep.com/production-incentives

For a list of US film tax incentives visit:

https://www.castandcrew.com/services/incentives-map/

https://www.mediaservices.com/blog/state-by-state-production-incentives-roundup-2022/

Economic Impact of Location Film and Television Production

Multiple financial analysis reports from leading accountancy firms (PwC, EY, Deloitte, etc.) on the efficacy of film tax credits demonstrates an economic impact return of between $2.00-$7.00 for every $1.00 spent to encourage inward production. Film and television productions must spend locally to gain an incentive, which results in about 60-70% of a film budget to be spent locally.

Economic areas where the expense is deployed benefits: hotels, motels, airbnb housing, short term rental housing, restaurants, dry cleaning facilities, washing facilities, taxis, uber drivers, construction materials providers, lumbar, hardware stores, clothing suppliers, airports, individual homeowners (site rentals), small businesses of all ranges. 

Additionally, inbound production benefits the local crew base of an area, training, elevating, teaching, promoting local film and tv crew members on the movies and tv series that shoot in the area. This benefits both the producers and the crew members, providing invaluable training and experience.

FilmBudget.com Worldwide provides film tax credit and production incentives analysis, calculation, and certification services. Its core service is professional film budget and schedule, film finance plans, and producer consulting services utilizing 30 years of Major Hollywood Studio and indie film producing experience by its founder, Producer Jack Binder (First Reformed, The Upside of Anger). For a list of our credits visit: www.FilmBudget.com/about – Get in touch for a complimentary consultation on your project via: www.FilmBudget.com/contact

We look forward to assisting you with you production and film finance requirements. For an analysis of your film tax credit amount get in touch for a complimentary consultation on your project!

About Jack Binder

Jack Binder is a film producer, line producer & DGA unit production manager working for The Walt Disney Company, Columbia Pictures, Lionsgate, New Line Cinema, HBO, Showtime & more. Produced by Jack Binder 'First Reformed', 'The Upside of Anger', 'Reign Over Me', 'Man About Town', The Search For John Gissing', 'Londinium', Indian Summer...
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